Insurance Shoppers’ Guide to Savings

Auto insurance can be expensive

Image courtesy of All American Auto Insurance

Image courtesy of All American Auto Insurance

While this summer isn’t seeing the frighteningly high gas prices we were dealing with just a year ago, much of the country is unseasonably warm, and those who don’t feel like their air conditioning bills eating away their income are just as likely to be pinching pennies for other reasons. You may not be able to control the weather, but one thing you can control is how much you pay for auto insurance.

5 Ways to save money

Whether you’re shopping for a brand new policy or considering a change in companies when your renewal is due, here are five ways you can save money when shopping for auto insurance rates:

  1. Have a Clean Driving Record. It may seem obvious, but if you haven’t racked up any tickets or been in any accidents in the past three-to-five years, you can save a significant amount of money on your auto insurance premium. As a renewal customer, you may be eligible for an automatic drop in rates as your clean driving record lengthens. As a new customer, you’ll qualify for lower rates from the start.
  2. Consider a Higher Deductible. The size of your premium is inversely proportional to the size of your deductible. What that means, is that a higher deductible gives you a lower premium. How much lower? Well, increasing what you pay out of pocket from $200 to $500 could net you a 30% savings, and if you go all the way to $1,000, you could be shrinking that premium by more than 40%. Of course, you should never agree to a deductible that is more than you can comfortably pay should you file a claim.
  3. Consider What You Drive. Many people don’t realize this, but what you drive absolutely impacts your insurance premiums. For example: if you have an older, paid for car, you may want to reduce or eliminate comprehensive and/or collision coverage. On the other hand, if you have a newer car that is still under a lease or loan agreement, you’ll need to have full coverage but you’ll likely be eligible for discounts if you have modern safety features like anti-lock brakes, a full complement of airbags, and an anti-theft device.
  4. Bundle Your Home and Auto. If you look to one company to carry both your auto and homeowners insurance, you’ll save around five percent with most insurers – some offer even more. You can increase that savings if you also add a life insurance policy to the mix.
  5. Discounts, Discounts, Discounts. The key to really saving money on insurance is to ask about discounts. Some of the most common include:
    • Low mileage – if you drive less than 14,000 (in some cases, 10,000) miles a year
    • Good grades – if you or your son or daughter is a full-time student under the age of twenty five, with a B-average or better, you can save up to 15%
    • Defensive driving – if you take a class, and it’s NOT to erase a ticket, you can get a discount of 5-10% that lasts up to three years (at which point you are usually free to take the class again).
    • Mature driver – If you are over fifty, you may qualify for a discount.
    • Hybrid cars – some insurers offer discounts for hybrids, to help offset the generally higher cost those cars incur.

And still more savings

While these are just a few of the ways you can save money while shopping for insurance rates, you should always shop early, and shop around. Some insurers offer a discount if you buy a new policy with them before your old policy is in danger of expiring, and all insurers have slightly different rates and discounts. Always make sure you ask questions, and always get your quote in writing.

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