7 Pointers To Keep Your Insurance Costs Down
Insurance is an integral part of our lives, whether health or car insurance. Before purchasing a new car or renewing your insurance with an insurer, it’s important to look at the available options before you pick one.
Various factors determine how much insurance you pay. Your location determines how much you spend. People in urban areas will often pay higher due to higher risks of theft and vandalism than those in rural areas and smaller towns. Your driving record will also contribute to the premium paid. In cases of past accidents, you are most likely to spend more too.
Amidst the above factors, there are ways in which you can get cheaper car insurance. Below are some of the hacks:
- Compare quotes
Thankfully, the internet has most of the answers. Before you consider insuring your car, it is always advisable to compare prices. This process takes roughly under 5 minutes as you can get different sites that will make a detailed comparison of different companies for you. There are also available online calculators that will help you calculate and see what insurance company is cheaper in your home area. The National Association of Insurance Commissioners allows you to click on their map where you click on your state and you get to compare prices of different companies. You also get to see complaints on each company. You don’t have to go for the bigger companies just because they advertise everywhere, get to compare with the rest and see your preferred company.
- Consider the insurance costs before purchasing a car
Before settling on what car you plan to buy, you need to consider the costs that may be involved. The most expensive vehicles may cost you higher premiums as they may be associated with higher replacement costs. Some companies may also base their premiums on the engine size of your car. A little known fact is that some vehicles are at higher risk of theft than others. Insurers may base their premium on that too. Research on cars that have a higher risk of being stolen and make an informed decision. A car with less horsepower may also factor in insurance costs.
- Keep your credit score in check
How often do you check your credit rating? Believe it or not, your credit score affects how much premium you pay in most states. Work on your credit score and ensure that the rating is good. If you are just out of school and you accumulated hefty student loans, ensure that you look for ways to repay. In the case that you are not in a position to pay, there is the option where you can have the debt cancelled off after some years. Here is some more student loan forgiveness information. Pay any loans on time to avoid risking a poor credit score which in turn leads to higher premiums.
- Higher deductibles lower insurance costs
A deductible is the amount you pay for repairs in cases of any damages before the insurance company covers the remaining balance. For example, if the amount of damage totals up to $1500 and your deductible is $500, then you will pay the $500 then the insurance company will top up the rest. The idea here is asking for a higher deductible which will in turn reduce the insurance costs hence you end up saving. Note, however, if you choose a higher deductible, ensure that you have some ‘caution money’ set aside to pay in cases of claims.
- Look out for discounts
Most companies offer discounts depending on different factors. For example, if you record low mileage annually, they may have discounts for you which may involve you paying lower premiums especially when they have a record of your mileage pattern. Some of these companies may offer discounts in form of group plans. Such plans may work in your favor if you get insurance through a group such as an alumni group or business group. Be proactive and ask your group networks if they have such a plan and you will be amazed at how much you save.
Insurance companies may also have a provision for discounts to people who have not recorded any accidents or had any violations in a couple of years. Other discounts may be offered based on installing antitheft devices, having higher deductibles or having defensive driving courses.
- Avoid comprehensive cover for an older car
If your car is quite old, then there is no need for a comprehensive insurance cover. This cover pays for car damage during fires, floods, and bad weather. Ultimately, this could cost a fortune which may not be worth the car insured. Your car may be old which translates to a lower market value which makes less sense to take out such a cover.
- Pay-per-mile or usage-based Insurance
Some insurers have options of you paying a premium depending on your mileage. If you know that you drive less often, this type of cover could work in your favor. A usage-based cover is based on how well you drive your car. In this case, the insurer will track your driving where they will offer discounts on how well you drive your car and how many miles you drive.
Car insurance is essential and how much premium you pay will be determined by the research you get and what action you decide to take. Make an informed decision that will end up saving you from the hefty premiums you could have possibly paid.