When it comes to car insurance, there are several ways you can save money. By taking a few simple tips into consideration, you can potentially get the coverage you need for a lot less money.
The first step is to look around and get quotes from different companies. It’s important to shop around every year or two to make sure you’re getting the best rates possible.
Boost Your Credit Score
Despite the common belief that driving safely and paying your car insurance premiums on time will not boost your credit, it can actually help to increase your credit score.
Failing to make your payments on time or missing them altogether can have an adverse effect on your credit, which will be reported to debt collection agencies and stay on your credit report for 7-10 years.
Taking defensive driving courses, staying accident-free and earning good grades can also qualify you for safe driver discounts. If you are able to get a discount on your auto insurance, it can save you money each month.
It is important to understand that not all states allow credit-based insurance scores, so the effect your credit has on your car insurance rates may vary between states.
For example, in California, Hawaii, Massachusetts, Michigan and Rhode Island, insurers can’t use credit-based insurance scores to determine your car insurance rate. However, if you have poor credit and need to renew your policy, it may be necessary to boost your credit score.
Combine More Than One Policy
One of the best ways to save money with your auto insurance is by bundling more than one policy. This will typically lead to a savings of at least 10% and can sometimes save you up to 25%, depending on the company.
Aside from saving you money, combining more than one policy can also be easier to manage. This is because you will only need to deal with one company for your various policies instead of multiple.
Another benefit is that you may be able to take advantage of other discounts. These discounts can be as simple as a higher deductible or an umbrella policy.
Insurance companies encourage their customers to bundle different types of policies, including home and auto coverage, as it can help them attract new business. It also can help them retain their existing customers, which is a big win for both parties.
Save Money With Safe Driving
Practicing safe driving habits can be an effective way to save money on your car insurance. Insurers reward responsible drivers who drive safely by offering discounts on their policies.
Some of the most popular discounts for safe drivers are accident-free savings and violation-free savings. They are available to policyholders who have not been involved in a vehicle accident or traffic violation within three to five years.
Another option is to sign up for a usage-based program. These programs monitor your driving using a telematics device or app and offer discounts on your policy based on your performance.
State Farm Drive Safe & Save is one of the most popular telematics programs available, and it offers discounts of up to 30% or, in some states, 50%. However, the program requires continuous monitoring and may not be right for everyone.
Remove Unnecessary Coverage
Auto insurance is a contract between you and the insurer that covers your losses in the event of an accident. It can also protect your car if it’s stolen or damaged by nature.
A good rule of thumb is to only carry insurance coverage that you need and nothing more. Having excess coverage can result in high insurance premiums that will only end up costing you more in the long run.
A quick review of your current policy should give you a clear picture of what you have and what you need. You can drop a few of the extras and save a bundle in the process.
If you’re in the market for a new policy, be sure to shop around and compare rates from at least a few different insurers.
Taking the time to consider the big picture will help you make the right choice for you and your family. The best way to do this is by calling up your insurer and asking for a quote.