8 Ways to Save on Car Insurance
By Michael Broach
Now that the days of cheap gas are over, people are constantly looking for ways
to save a few bucks on their car. Most people will look for ways to make their car
more fuel efficient, but another way to save is to lower your insurance premiums.
We usually don’t think about how much we spend on car insurance -- until we get
the bill. Then we complain about the amount as we write the check, but we forget
about it again as soon as we mail the payment. Here are eight tips to help you lower
your rates and save some money (so you can buy more gas). Most of these tips will
help lower your premiums without much effort on your part; usually a simple phone
call is all that is required.
1. Shop around
Get at least three price quotes from different insurance companies in your area.
Also, explore the different types of insurance companies that are out there. Some
insurers sell through their own agents, while others sell via the Internet without
an agent as the middleman. Don’t worry if your driving record isn’t crystal clear
-- you should still shop around from company to company as you might find cheaper
insurance. Your savings could be hundreds of dollars depending on the level of competition
in your area.
2. Get a higher deductible
Asking your insurance company to raise your current deductible can save you big
bucks. A small word of advice before taking that step: Be sure to keep at least
the amount of the deductible on hand, because you’ll be responsible to cover that
amount if something happens to your car. In other words, when you raise the deductible
you are telling the insurance company that you will pay more out of your pocket
if you get into an accident. Going from $200 to $500 could save you up to 30%. Go
all the way from $200 to $1,000 and you could be coming close to cutting your rate
in half.
3. Reduce the coverage
Lower coverage means you’ll receive less money from your insurance company in case
of an accident. If you have an older car or if you’ve paid off your car, this option
could be particularly appealing. If you opt to drop the collision and comprehensive
coverage and stick with the liability option, you’re premium will be reduced because
you’ll only be insured for damage to other people’s property. If you decide to reduce
your coverage, do some investigating and find out what your state's laws on minimum
car insurance are. Savings can vary depending on what your current coverage consists
of, but in some cases it could drop a signification percentage off of what you pay.
4. Use the same insurer for multiple policies
Many companies will provide a discount on car insurance if you also allow them to
cover your house as well. In some cases, this can amount to a 10% savings. If you
have two cars covered on the same policy, you may also be eligible for a discount.
Be sure to do the math and make the best decision for both your home and auto insurance.
5. Low mileage discounts
If you typically put very few miles on your car in a given year, some companies
will give you a break on your insurance. The actual number of miles and the size
of the discount will vary from one insurance company to the next, so be sure to
ask your insurance company for details.
6. Group insurance
Any group or club you are a member of might offer discounts on car insurance. Verify
with your employer, alumni group or professional society to see if they have such
a benefit. Depending on the size and location of your group or club, this can be
a substantial discount.
7. Safety-equipped car
Make sure you are getting credit for having a safety-equipped car. Contact your
insurance company and make them aware that your car has such things as daytime running
lights, anti-lock brakes, an anti-theft system, and air bags. Anything that makes
your car safer may lower your rates by 7% to 10%. The amount of money you will save
depends on the insurance company and the equipment in your car.
8. Long-time customer
Some companies will reward their customer with a loyalty discount. If you have been
with the same insurance company for five years or more, call and find out if you
might qualify for a loyalty discount. Not all insurance companies will offer this
rebate, but those who do could give you up 10% or 15% break on your insurance rate.
If you’re shopping around for insurance, be sure to ask about these loyalty discounts.
After reading through this list I hope you have found at least one thing that will
help cut the cost of your insurance. Some suggestions may save you more money than
others, but remember that every penny helps. And although this list provides some
simple ways to save money on your insurance, there are more drastic means to cut
your rates. Contact your insurance company to learn more. Good luck and safe driving.
Michael Broach is a staff writer for
Accent Accounting, an accounting firm providing services for
small businesses and individuals in the Huntsville, Alabama area.
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