Car insurance can be costly, although it differs from one insurer to another. Some of the factors that determine your premium are your driving history, credit history, miles covered, car age, car modifications, engine capacity, and the make and model of the car.
Understanding what goes into a car insurance policy and how to get affordable auto insurance helps you find a policy that best suits your needs. Below are car insurance tips every car owner should know.
1. Shop around and compare insurance policies
While it may be tempting to go for the cheapest available policy due to a tight budget, choosing an expensive car insurance policy doesn’t always guarantee extensive coverage. This is why it’s a good idea to shop around and compare different policies and scrutinize their offerings before settling for one that best aligns with your needs.
Don’t forget to check the creditworthiness of the potential insurers to determine if they can compensate you. This protects you from dubious insurers. Knowing the top car insurance companies near you helps in your search for the best insurance.
2. Install security devices in your vehicle
Cars with fitted-in security devices like vehicle tracking systems and car alarms have the potential to reduce your insurance premiums. While this may be expensive, protecting your vehicle from thieves and having it insured makes it a worthy investment.
3. Maintain a good credit history
Besides determining your car loan amount and interest rate, your credit history plays a role in determining your car insurance rate. Depending on your credit score and report, insurers can predict your chances of getting into an accident. They assume that you’re likely to be careless if you have a bad credit history, contributing to high insurance premiums. Consider keeping your credit card spending on the lower side, pay your bills on time, and find other ways to build a strong credit history.
4. Raise your deductibles
Deductibles are the out-of-pocket amount you pay before the insurance company comes in to clear the rest. Increasing your deductibles lowers your premium. However, before using it as a means to reduce your car insurance cost, ensure that you have the financial capacity to cover part of the damages if you suffered an accident today. For example, if you have an insurance policy worth $2000 and your deductible amounts to $1200, it means that after a car accident, the insurer will cover $800 while the remaining $1200 will be on you.
5. Take advantage of policy discounts
Before deciding on a policy, find out about the discounts available to you. Some of the discounts to look out for include multi-vehicle discounts, which you get for insuring more than one car. A safe driver discount is available to those with clean driving records, while a good student discount is offered to students with good grades.
Taking a defensive driving course also allows you to earn a discount. Consider combining several policies like car insurance, homeowners, renters, and more can earn you lower insurance premiums. You should first find out if your insurance company offers such considerations to its clients. If not, continue with your search for an insurance policy with better offers.
6. Consider paying your car insurance twice a year
When you stick to paying monthly insurance premiums, you end up paying more. However, if you pay your premiums upfront and renew every six months, you can get lower insurance premiums. Consider setting up an automatic bi-annual payment with your insurance company to avoid service fees.
Affordable insurance policies aren’t hard to find if you look keenly. Use the above hacks to enjoy low premium rates and make it a habit to shop around for better policies at the beginning of each renewal period.