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8 Tips to Put the Brakes on Car Insurance

8 Tips to Put the Brakes on Car Insurance

Car insurance can be expensive but if managed correctly you can minimize costs and still get the appropriate coverage you need in the event of an accident. Some steps may seem obvious like raising your deductible and avoiding speeding tickets but others might be less so. The following tips can help you save hundreds of dollars per year when paying for auto insurance.

1. Raise Your Deductible

Many insurance policies start with a standard deduction of $250. By increasing this to $1,000 you can sometimes save approximately 30% to 40% in insurance premium payments. The reason for raising your deductible is that the money saved by having lower premiums is often more than what is paid for one or two claims out of pocket.

2. Comparison Shop

Shopping around is always to your advantage because competitors will offer significant discounts and other incentives to get your business. Pit auto insurers against each other by quoting prices and asking for discounts. When you get your annual or semiannual bill ask yourself if this is the best you can do and take the time to call a few other insurers to verify your getting the best deal.

3. Drive Less

Many auto insurers base your rates off of a number of different factors, one of which is total mileage per year. If you don't drive very often or very far ask if there are lower premiums for low mileage. Consider using public transportation, carpooling, walking and biking to minimize automobile use and save money.

4. Combine Policies

In order to attract new business and increase revenue many insurance companies will offer combined coverage and pass on the cost savings to customers. When speaking with your auto insurer, ask if they combine auto and home policies and if there are significant price discounts. If your insurance company doesn't offer this service consider going to a competitor since savings could be anywhere from 20% to 30%.

5. Drive Safe

Auto insurance companies, in an ideal world, would only ensure individuals who drive safe and never get in accidents. One surefire way to have your insurance premiums increase, and possibly lose it all together, is to get tickets for speeding, reckless driving and driving under the influence. If you're interested in saving money on auto insurance then use good judgment and be a conscientious driver.

6. Check Your Credit

Your credit history applies to more than just buying a house or getting a new credit card. Many companies will use a consumers credit report to justify denying employment, limit renting an apartment and in this case, increasing your insurance premiums. While this might seem unfair, studies have been conducted that show a correlation between consumers with bad credit and increased auto insurance claims.

7. Ask For Discounts

Auto insurance companies won't go out of their way to save consumers money but they will offer discounts if you qualify and ask. If you have teenage drivers ask for a good student discount. If you're purchasing a certain type of car ask for a discount for enhanced safety features. Being a member of certain organizations or being over a certain age can also result in qualifying for discounts. At the end of the day it doesn't hurt to ask.

8. Know Your Policy

Many consumers don't reevaluate their auto insurance needs every few years which results in paying for coverage that is no longer necessary. A perfect example is paying for full coverage auto insurance on a vehicle which is 16 years old and paid in full. Since you own the vehicle, full coverage is no longer required and older vehicles often don't benefit from comprehensive and collision insurance. Paying for extras like bodily injury and roadside assistance may also be unnecessary based on your needs.

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