Saving cash on car insurance – and on all types of insurance, for that matter – requires analytically savvy, familiarity with insurance coverage, attention to detail and a good understanding of the risk insured, be it collision or death.
By following specific measures, you can keep some extra cash in your wallet and use it to build up your nest egg or fund that extra vacation to Bali you have been dreaming of all year long. You can reduce your car insurance premiums though carpooling, policy combination, higher deductible and tracking device implementation, among other factors.
How Do I Increase My Deductible?
You can lower your automobile insurance bill if you increase your deductible. Keep in mind your deductible is the amount of the check you would write to cover expenses before your insurer makes a financial gesture. So, for example, if your deductible is $1,000 and a traffic accident prompts you to send your car to the mechanic for a $900 repair, you are on your own and don't expect to hear from the insurance company. But if the repair cost were, say, $5,000, the insurance company would dole out $8,000 and add it to your $1,000 to cover the whole repairs.
Can I Save Money Through Carpooling?
Carpooling is also known as covoiturage, lift-sharing, ride-sharing or car-sharing. This practice enables several people, often unrelated to each other, to share a ride to save on things like gas, tolls and insurance bills. If you carpool, you drive fewer miles, and fewer miles translate into a lower insurance bill because the overall cost is shared by the three people with whom you're carpooling. To learn more about ride-sharing or to find carpooling options in your area, contact your city's or state's Department of Transportation.
Should I Purchase Only What I Need?
People often tend to purchase more insurance that they actually need, out of an abundance of caution or because the insurance agent has not clearly explained things like coverage needed and deductible amount. Check your car's value through Kelley Blue Book before buying insurance. If your vehicle is new, lenders and insurers would require that you get both comprehensive and collision coverage, especially if you took out a loan to buy the car and have not posted any other amount as guarantee with the lender. Comprehensive insurance pays for the replacement or repair of your automobile from damage that doesn't result from an accident, while collision insurance covers damages if your car is structurally disfigured. If your vehicle is old and not worth much, comprehensive coverage may not be a suitable option for you.
How Can I Combine Policies to Save Money?
Try to combine all your insurance policies under the same umbrella, giving that business to a single insurance company. But make sure the insurer is a reputable player and enquire with your local Better Business Bureau branch and your state's Department of Financial Services to learn more about the insurance company. This is important because you're putting all your coverage eggs in the same basket, and you would want to make sure that the basket is sturdy. Most major insurance companies offer clients some types of discounts if they combine multiple policies, such as homeowner insurance, car insurance and renter insurance.
How Often Should I Check My Driving?
Similar to carpooling, reduced driving takes more dollars off your insurance bill. Check your driving, keeping an eye on things like shopping patterns; how many trips to the local grocery store you make every month; whether your commute to work has increased substantially lately; and whether, say, your son's twice-a-week soccer practice has added more miles to the odometer. The goal here is not to change your lifestyle drastically but to identify patterns that invariably increase your overall mileage – and insurance bill.
Should I Opt for a Tracking Device?
A tracking device may result in a lower car insurance bill, but talk to your insurer to see what options are available and potential discounts you could receive after purchasing such a device. The tool basically enables the insurance company to monitor things like your driving behavior and mileage. For example, Progressive Insurance's Snapshot mileage-based tracking device enables the company to track how many miles you drive but also how you are driving them – meaning where you go, how often you go there and how you fast you get there.
Can I Lower My Insurance Bill by Promptly Paying It?
As with any other bill, you need to promptly your insurance premium to avoid a mishmash of inconvenient events ranging from a lower credit score and intempestive collection calls to a lack of coverage and reprimanding law enforcement, especially during random traffic stops. Sending your premium checks to the insurer on time helps you build up goodwill that could prompt the company to reduce your premiums in the future.
You can save money on your car insurance through a variety of methods, from timely premium payment and carpooling to driving checks and the purchase of a tracking device. Talk to your insurance agent to see if there are other money-saving options available to a policyholder like you.