With very few mass transit systems in the U.S., most Americans have to deal
with the annoying — but necessary expense of car insurance. Making a payment for any type of insurance coverage may feel like a waste of money, especially when money is tight and the coverage isn’t tangible. But the risks of allowing your policy to lapse are multifaceted. You may face the loss of transportation, find it difficult to acquire insurance in the future and be left with the financial consequences of the loss. Plus, you may have to assume the full cost of any liability or property damages that occurred due to your negligence.
Insurance is a necessary evil in today’s society. But when it comes to the cost of car insurance, some factors may be out of your control. For example, the state you live in will have a huge impact on your insurance premiums. According to data compiled by the Insurance Information Institution, the District of Columbia to has the highest insurance rates followed by New Jersey and Louisiana. The lowest rates are enjoyed by citizens in the midsection of the country – the Dakotas, Idaho and Iowa. But no matter where you live in the country, there are still some simple ways to cut insurance costs and reap big savings.
Methods to Lower Your Insurance Rates
- Only pay for what you need. Most car insurance providers no longer give a heads up to their policyholders when they’re paying for coverage that exceeds their needs. So this means that consumers need to look out for themselves. Take out your policy and review it annually. Consider the age of your vehicle and whether you should be paying for collision and comprehensive coverage. Drop or lower this coverage on a car over 10 years old and see a premium reduction of 20% or more.
- Ensure accurate policy information. In the process of reviewing your policy to align it with your needs, it’s important that the premium is based on accurate information. Discrepancies in your age, where you live and your driving record and habits may raise or keep your rates higher than they would be with the correct information on record. It’s important to speak with an agent when your commute to work changes or you move from an urban area to the suburbs to see a rate reduction.
- Raise your deductibles. Deductibles are a major part of any car insurance policy; the lower the deductible, the higher your premium will be. The purpose of the car insurance deductible is to discourage using automobile insurance policies for small claims. Before raising your deductible, consider your ability to pay it. Increasing to a mid-range number of $500 may be a reasonable rate that will lower your premium. Beware of one of the newest insurance strategies called a ‘disappearing deductible.’ You’ll need a perfect driving record and will pay more upfront for the discount.
- Bundle your insurance policies. Just as media companies package Internet, phone and cable services at a discount, insurance companies provide as much as 25% off for multiple types of insurance. Consider combining your car, home and life insurance in one bundle. Contact your policy holder and ask about insuring multiple cars for additional savings.
- Comparison shop for a better deal. Watch a few hours of television and you’ll see a number of companies competing for your business. Search online and you’ll find sites that will do the comparisons in a few minutes between major companies. When speaking to an agent, ask about senior or good driver discounts, if they apply to you. If you’re satisfied with your current insurer, give them an opportunity to meet or beat your best quote. There is no excuse to pay more.
- Maintain good credit. If you’re shopping for a new policy, insurance companies may access your credit rating to help calculate your rates. A poor credit score will result in a higher quote.
- Keep a clean driving record. Unlike other products and services, the cost of insurance is impacted by consumer behavior. An excellent driving record free of tickets and accidents may not lower your insurance premiums but will prevent it from rising.
Cutting expenses is within everyone’s reach, as long as you’re willing to making the necessary changes. Keep in mind that the cheapest is not always the best — so if you’re shopping around for other insurance providers, compare all the details of each plan before you decide to switch.
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