Yes, auto insurance is expensive, but there should always be a way to make this a little bit lighter for your wallets. This article will discuss some of the tips and tricks that could be used to save more.
- 1 What is Auto Insurance?
- 2 1. Shop for the Best Insurance Company
- 3 2. Bundle insurance policies on one insurance company
- 4 3. Improve Your Credit Score
- 5 4. Group Insurance Discount
- 6 5. Increase your deductibles
- 7 6. Drive Mindfully
- 8 7. Premium Depends On Number Of Miles Driven
- 9 8. Look Around For Better Plans
- 10 9. Undergo A Driving Lesson
- 11 10. Increase The Deductibles
- 12 11. Creditworthiness
What is Auto Insurance?
Auto insurance is an underwriting between an insurance holder and an insurance provider. Like any other insurance, this aims to protect from financial losses and unexpected events like accidents and theft. An insurance company provides this service in exchange for a monthly premium paid by the policyholder.
Auto insurance services have three primary coverages: the property, the liability, and the medical. The property is the policyholder’s coverage to physically damage the auto may obtain. Next, the liability is for any damage, not to the car, but the property owner. Lastly, the medical coverage is for the hospitalization of the policyholder and beneficiaries. The insurance company will shoulder the policyholder’s treatment, lost wages, and even funeral expenses if death is involved. It should be clear that this coverage of the auto insurance covers the policyholder themselves and their chosen beneficiaries, e.g., family members.
Take into note auto insurance’s basic coverage only includes the detriment caused by your car and not the damages to a policyholder’s car. If a policyholder wished for other content, other types of coverage are available by different insurance companies. These additional coverages are the Collision, Comprehensive coverage, and Glass coverage. The collision coverage covers the policyholder’s auto, which collides with another vehicle or even other objects. The insurance company is to issue a reimbursement to the policyholder for the property’s damage. At the same time, the Comprehensive coverage is for uncommon accidents and thefts such as vandalism, flood, fire, hail, etc. The last coverage, glass coverage, covers the glass issue of the auto, like windshields, windows, and so on.
Unlike other insurance like travel and pet insurance, auto insurance is not elective but is mandatory, most especially in the USA. These policies usually may last from 6 to 12 months and are renewable.
Here are some of the tips to a cheaper Auto Insurance
1. Shop for the Best Insurance Company
In buying insurance it is important to get to know the insurance company thoroughly. Insurance companies’ services may vary from each other, so as the prices for the insurance premiums. Before you settle for one company, try getting at least three car insurance quotes from different companies. Aside from the services and fees, policyholders must also consider the state of the insurance company. It should be well established and reputed, financially strong companies as you don’t want to be stuck when you need them. Read reviews of these companies. Sites like Insuranks may help you in this process, combining both expert and customer reviews of insurance companies and products.
Talk to agents about your preferences and what these companies could offer to meet these preferences. Talking to the company itself is a good idea as well. Ask for feedback from other policyholders, family members, friends and even acquaintances who also have car insurance. This way you’re able to find the cheapest car insurance policy without compromising on coverage and quality of the insurer and service.
2. Bundle insurance policies on one insurance company
Bundling your auto insurance policy with your home insurance policy through one insurance company may save you a good amount of money. Additionally, if you have multiple vehicles, it is better to ensure these vehicles with one company on a multi-car policy, which can save you more. Research online and ask your car insurance provider about bundle discounts.
3. Improve Your Credit Score
Keeping the right credit score is also a factor in securing a cheaper auto insurance cost. According to the insurance information institute’s spokesman, Michael Barry, good credit score is a significant factor because many auto insurance companies are using a credit score-based evaluation. These auto insurance companies believe that if a person is financially responsible, he/she will be a lower risk for them to insure.
4. Group Insurance Discount
Auto insurance companies may issue a discount to a policyholder who acquires car insurance through a group. This group could be formed by your workplace, association of profession, or even family and alumni groups.
5. Increase your deductibles
Increasing deductibles help in lessening your auto insurance monthly costs. If your deductibles are higher, your coverage can get less by 15% to 30 % if you increase $200 to $500. But before you decide to try out this tip, the policyholders must have stable and secured finances.
6. Drive Mindfully
Accidents are uncalled for and thus you must drive carefully to avoid accidents and violations. The insurance company provides you with certain points if you successfully avoid any accidents. Moreover, higher points may lead to lower insurance premiums.
7. Premium Depends On Number Of Miles Driven
While availing insurance plans from a company, they ask you several questions to understand your requirements. They will also ask you about the number of kilometers you are planning to drive the insured vehicle every year. Accordingly, your premium will be decided.
For instance, a person who drives forty kilometers every year will have to pay a higher premium amount every year as compared to someone who drives twenty kilometers every year. It is recommended to make use of the mass transit to rack up lesser kilometers. However, to be eligible for a discount, the user needs to decrease the number of kilometers he drives the insured vehicle in a year.
8. Look Around For Better Plans
Make sure to remember that what comes for a lesser price is not always good. In case the policy is about to expire, the user needs to look around for better premium plans from better organizations. It is also a good idea to get quotes from different organizations once or twice each year. However, it is recommended not to go with organizations that charge more because higher prices do not always translate to the best insurance plans.
The creditworthiness of an organization needs to be taken into account. Check the reviews and ratings given by previous clients to gauge whether the organization pays the insurance claim on time.
9. Undergo A Driving Lesson
Few companies provide discounts and offers to people who have undergone driving lessons. Thus, drivers who undergo such a course get an added advantage and they are often rewarded with extra points.
Before opting for any company, car insurance holders need to ask the companies about the advantages they will get if they undergo a driving lesson. The rules and regulations differ from one company to another. Hence, it is advised to talk to the company about the discount they are willing to give if you take up a driving lesson.
10. Increase The Deductibles
The deductible refers to the amount of cash you will have to pay in case of any theft, accident, or another type of damage to the car before you get your insurance money. People need to select their deductible amount while selecting their insurance plan. The higher the deductible amount, the lower will be the premium you need to pay. Also, make sure to ask the insurance agent that by what percent you should increase the deductible amount and how it will affect the premium.
The record of a driver plays a crucial role in determining the premium he needs to pay. Make sure to have a good credit score to get the best deal in the market.
There are many other ways to get cheaper auto insurance. The key to this is making a good research, comparing quotes online and having good communication with your agent and chosen auto insurance provider.