Five Ways to Cut Your Auto Insurance Premium

by Kevin on June 21, 2012

Car insurance is one of those expenses that come under the category of “necessary evil”. No one really wants to have it, but we must, either because of the real liability we’d be exposed to in the event of an accident claim, or simply because the law requires us to have it.

But just because we need to have it doesn’t mean we shouldn’t look for ways to pay as little for as possible while still maintaining an adequate level of coverage. Here are five ways to make that happen.

Drive carefully and watch those points!

Not many people think about this as a way of saving on car insurance—until they get a ticket for a moving violation and the resultant increase in their insurance premium. By then, however, it’s already too late.

Many years ago there was a public service commercial that would come on from time to time that would show a dangerous accident, followed only by the words, “Watch out for the other guy”. Both the commercial and the message were painfully simple, but the lesson still applies. Never assume you know what other drivers will do, or that they know what you will do.

Slow down, brake sooner, never try to beat a traffic light, stop at intersections, watch for pedestrians—especially children—and never drive under the influence. Try to think about it each day to heighten your awareness of what could happen. A single ticket or accident can send your insurance premium into orbit.

Defensive driving courses to the rescue

We normally think of driving courses in connection with new drivers but the fact is you can take one at any point in your life.

Defensive driving courses not only show you how to drive more safely, but they also show a desire to become a better driver. Auto insurance companies will often lower your premiums as a result of successful completion of a course.

This is especially good advice if you’ve recently gotten a traffic ticket. Some traffic courts will waive the points if you agree to take a defensive driving course, and since points equal higher insurance premiums this may be the recommended course of action.

Before rushing out to take a defensive driving course with the intent of lowering your auto insurance premium, first contact your insurance provider to see how they handle it. Make sure that they offer a premium discount for completing the course and, if they do, how much it will save you. If the savings aren’t that great you may not want to take the course—or you may want to find another insurance provider with a bigger discount!

Every so often, shop around

This isn’t to say that you should make changing your auto insurance provider an annual event, only that you should keep your eyes and ears open for any deals that may be available. As you move through life your situation is changing and some of those changes might result in lower auto insurance rates—but don’t count on your current insurance company to let you know about it.

Some insurance companies count on our loyalty and raise our premiums incrementally, but not enough to move us to take action. Over time those increases can make our premiums uncompetitive with the going rates offered by more aggressive insurance companies.

Every two or three years check and see what the competition is offering and if you can get lower rates. If nothing else, you may be able to get a good quote then go back to your current provider to try to cut a better deal.

Ask your auto insurer what discounts are available

There are more auto insurance discounts then most of us are ever aware of, not the least of which since some might only become available due to life changes. Some of the discounts that may be available include:

  • Reaching certain age levels
  • Safe driver discounts
  • Affiliations, like AAA or AARP
  • Education attained
  • Certain job classifications—look into this if you’ve changed careers
  • Number of miles driven each year
  • Military service
  • Government employment
  • Car make and model
  • Vehicle safety equipment

That’s just a sampling—check with your insurance provider or any you’re thinking of signing up with to see the complete list of discounts. You might qualify for one or more that can lower your premiums by a material amount.

Increase the deductible

I’ve saved this one for last, not only because it’s the most typical advice, but also because it isn’t always the right thing to do.

If you’re generally a safe driver with few (if any) traffic citations or accidents, increasing your deductible is definitely worth considering. If however you have a poor driving track record with a predictable history of insurance claims this strategy is better ignored.

Another consideration is your level of savings. When you raise your deductible you’re increasing your liability in the event of a claim. If you’re a saver and have sufficient money to cover the full deductible and still have money left over then you’re in a good position to increase your deductible.

If on the other hand you don’t have much in the way of savings to cover the deductible you’ll be better off keeping the deductible as a low as possible.

What other methods do you know of that can lower car insurance premiums?

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