Looking to trim some of the fat in your monthly expenses? Well, one expense that most people have and often overlook is their car insurance. There are several ways to reduce your car insurance and start saving!
Be a Good Driver
Simply driving well can lower your car insurance rates (and it is never too late to start making more of an effort to do so). The following are tips that responsible drivers can take advantage of in order to lower their car insurance rates (or keep them low).
- Avoid accidents
- Follow traffic laws and avoid tickets
- Take a defensive driving class
- Pay the fee for a deferral
- Get a telematics device through your insurance company
This is a simple one, but it is true! Every time you have to file a claim against your car insurance, they recoup their costs by increasing your premium. This is, of course, not the case if an accident is the fault of the other driver (their insurance pays the claim, which means their premium goes up, not yours). Driving carefully can pay dividends!
You might think speeding may make it worth it to get to work on time, but those tickets can add up quickly. Whenever you get a traffic ticket, be it for speeding, failure to stop, failure to yield, etc, your insurance company is notified and may raise rates. Why? Because if you are getting traffic tickets, it means you are not following traffic laws, and if you are not following traffic laws, you are more likely to be at fault for an accident, which is a financial liability for your insurance company. However, if you do get a ticket, there are ways to avoid having it go on your driving record.
Many states allow you to take a defensive driving class in exchange for having a ticket never be on your driving record. If it never hits your record, your car insurance premiums never go up. Not only that but if you report to your insurance company that you have taken a defensive driving class, you may even qualify for a discount. It is a win-win!
If this is one of your first tickets, a deferral is a good option if you get a ticket. A deferral means that, in exchange for both paying the ticket and an extra fee, the traffic infraction does not appear on your driving record. If you are able to go through the deferral period without getting any more tickets, it is permanently expunged. During this whole process, your insurance company is not made aware of your traffic ticket, meaning your premiums are not affected.
Many larger car insurance companies have telematics devices that can help lower your rate. How they work is they plug into the car-diagnostic portal (usually to the left and under the steering wheel). This device sends driving information to your insurance company, including how fast you accelerate, how fast you drive, etc. Since the insurance company will get relatively real-time information about your driving, they have more evidence as to whether or not you are a safe driver. If they have proof that you are a safe driver, they will be more willing to offer you lower rates!
Take Advantage of Insurance Discounts
Being a safe driver is not the only way to save on car insurance. Simply being a savvy shopper and being aware of how to get discounts can reward you with savings.
- Use multi-policy discounts
- Get good grades
- Shop around!
- Ask for a discount
If you have not already bundled your numerous insurance policies together, this is a great way to save. For example, if you have car insurance through one carrier but homeowner's insurance through another, getting them both on the same insurance provider can save you on both. This is true of having policies on more than one vehicle, houses, renter's insurance, and even life insurance.
Young people often struggle with getting low car insurance rates since they are statistically most likely to get into a car accident. However, if you are a good student, you may qualify for a good-grades discount. No, this is not because your car insurance is vested in your education. Statistically, students who get good grades are also less likely to be at fault for car accidents.
The car insurance market is full of competitors all wanting a chance to get at your dollar. They know that once a customer is with a company, they are very unlikely to leave, so they have incentives to bring in new blood. Simply shopping around may get you quotes that are competitive to your own, simply because you are a new customer! There are also other good reasons to shop around:
This may seem silly, but you would be surprised how effective it is. Sometimes there are discounts available that you qualify for that simply have not been applied to your account. It is not your insurance provider being malicious, sometimes accounts just slip through the cracks! They also may have retention policies designed to keep customers who are thinking about leaving by offering rate incentives. There are several other reasons to ask as well:
- You got older! The older you are, the cheaper your car insurance usually is (with the exception of the elderly, of course). If you have not had your policy evaluated in years, you may qualify simply because you have aged. This is especially true if you were younger than 25 when you signed up for insurance (this is that statistical cut-off for many insurance companies to charge a "young person" rate, which is more expensive).
- You have not had an accident in a long time! If you had an accident or two within a certain timeframe when you signed up for insurance, you may now qualify for a safe-driver discount if enough time has passed. Generally, five or more years are required for insurance companies to reconsider your premium based on accident history.
There are plenty of ways to save on your car insurance. Drive safe, shop around, and simply asking can be your best methods of saving!
