How to Cut Costs on Car Insurance?
One of the best ways to keep your auto insurance costs down is to have a good driving record.
What you can do to cut costs on car insurance?
1. SHOP AROUND
The prices vary from company to company, so it pays to have an independent agent who represents many carriers.
a. You can call companies directly (but that takes a lot of time)
b. You can access information on the Internet (but you don’t know if you are even dealing with someone in your state)
c. Or you can contact Austin Insurance Group (a local agent) and let us compare rates with multiple carriers, saving you time and money.
You are buying insurance to protect you financially and to provide you a peace of mind. It’s important to pick an agent that is reliable and an insurance company that’s financially stable.
You can check the financial health of insurance companies with rating companies such as A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com/ratings).
When you get quotes from different types of insurance companies, keep in mind that:
- Some companies sell through their own ‘captive’ agents. These agencies have the same name as the insurance company.
- Some sell through independent agents who offer policies from several insurance companies (Austin Insurance Group is an independent agent authorized to provide insurance from multiple “A” rated Texas carriers.
- Other insurance companies do not use agents. They sell directly to consumers over the phone or via the Internet. But you will not necessarily be talking to the same person, office, city or state each time you call. And you usually have no local representation.
One piece of advice: Don’t shop by price alone. You can also ask friends and relatives for their recommendations, keeping in mind that your rates will be different that your neighbors based on age, driving record, vehicle, occupation, prior insurance, your coverage selection and, yes, even credit.
Most importantly, pick an agent or company representative that takes the time to answer your questions and explain your coverages. You don’t want to find out after an accident, how different coverages can protect you.
2. BEFORE YOU BUY A CAR, COMPARE INSURANCE COSTS
Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the cost to repair it, the price of the car, its overall safety record and the likelihood of theft.
To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org). Many insurers offer discounts for features that reduce the risk of theft or injuries.
3. CONSIDER HIGHER DEDUCTIBLES
Deductibles are what you pay before your insurance policy pays. You can request a higher deductible and it will lower your costs, sometimes substantially. For example, increasing your deductible from $250 to $500 could reduce your collision and comprehensive coverage cost by 10 to 30%. And choosing a $1000 deductible may save you up to 40% or more depending on your premiums. Before choosing a higher deductible, make sure you can pay the deductible in the event of a claim and make sure your loan company will allow you to have a $1000 or higher deductible.
Also keep in mind that you can take a lower deductible for comprehensive and a higher deductible for collision. They don’t have to be the same. The greater savings will come from a higher collision deducible, not necessarily from a higher comprehensive deductible.
4. REDUCE or REMOVE COVERAGE ON OLDER CARS
Consider dropping comprehensive and/or collision coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective by the time you pay premium and a deductible in the event of a claim.
Some insurance companies will also let you carry comprehensive without collision.
You can look up the value of your car online at Kelley’s Blue Book (www.kbb.com) or your bank or auto dealers can tell you the worth of cars. And always review your coverage at renewal time to make sure your insurance needs haven’t changed.
5. BUY YOUR RENTERS or HOME AND AUTO INSURANCE FROM THE SAME INSURER or AT LEAST THE SAME AGENT
Most insurers will give you a discount when you buy two or more types of insurance. You can also get a discount when you insure more than one vehicle on the same policy.
Some insurers offer discounts and rewards the longer you are insured with them, but it still makes sense to shop around! You may save money buying from different insurance companies, compared with a multi-policy discount which is one advantage of having an independent agent that can compare rates for all of your policy needs.
6. MAINTAIN A GOOD CREDIT RECORD
You can cut costs on insurance by establishing a solid credit history. If you have no credit at all, you will generally pay more. So even just getting a credit card for gas purchases, can help you establish credit. Most insurers today, use credit information to price auto insurance policies because the research shows people who responsibly manage their credit have fewer claims.
To protect your credit standing, don’t obtain more credit than you need, pay your bills on time, and keep your credit balances as low as possible. Check your credit record on a regular basis and if you see errors, have them corrected promptly so that your record remains accurate.
7. TAKE ADVANTAGE OF LOW MILEAGE DISCOUNTS
Some companies will offer discounts to drivers who drive less than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work. For instance, the Snapshot Program offered by Progressive. (more info)
8. ASK ABOUT OCCUPATION or EDUCATION DISCOUNTS
Some companies offer reductions to drivers in certain professions like teachers or engineers. And some even offer discounts depending on your level of education.
9. INQUIRE OUT OTHER DISCOUNTS
Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years, and offer 3 and 5 year accident free discounts.
If there is a young driver on the policy who is a good student, you may also qualify for a lower rate.
Many companies offer an early shopping discount if you start shopping early, instead of waiting until the last minute to buy a policy.
And most offer some type of paperless discounts if you choose to sign and/or receive your documents by email or online.
When you comparison shop, inquire about discounts for the following:*
Higher deductibles
Low Annual Mileage
Prior Insurance
Multi-car
No Accidents in 3 Years to 5 year
No Moving Violations in 3 Years to 5 years
Student Drivers with Good Grades
Preferred Prior Carrier Discounts
Auto and Homeowners Coverage with the Same Company
College Students away from Home
Good Credit Record
*The discounts listed may not be available in all states or from all insurance companies.
See a list of the discounts we offer with Progressive here.
The key to savings is the final price. A company that offers few discounts may still have a lower overall price.
