If you own a vehicle, you’re probably familiar with the basics of car insurance: coverage that can help drivers in case of a collision or accident. However, auto insurance options can be a significant financial burden if selected without much knowledge.
Fortunately, drivers can save money on auto insurance by understanding different packages, the cheapest cars to insure, and what discounts are available. With basic car insurance knowledge and using smart strategies, you can save money while maintaining good coverage.
Understanding Car Insurance
Breaking down necessary terms and different insurance options can help you navigate auto insurance like a pro.
Typically, auto insurance is a contract between you and an insurance company that may help you avoid financial loss in the event of an accident or theft. The basic types of car insurance coverage include:
- Liability coverage: This can help pay for damages and injuries for which you are legally liable to others due to an accident.
- Collision coverage: This coverage can help pay for damages to your car from a collision with another vehicle or object, regardless of which driver is at fault.
- Comprehensive coverage: This coverage helps with damage to your car that’s caused by an event like vandalism, fire or theft of your car.
When purchasing auto insurance, you’ll also have to differentiate between personal and commercial auto insurance policies. For most drivers, personal auto insurance is the most acceptable option. This policy may include coverage for things like liability, medical payments, and collision.
Commercial auto insurance is the policy you should choose if you use vehicles for your business. This type of policy can cover cars, trucks, and vans when driven for business purposes. If you use a vehicle to make your income, looking into commercial auto insurance is a great strategy.
Choosing adequate coverage is crucial when it comes to driving. Now that you know these insurance terms, you can better select coverage that aligns with your specific needs.
Shop Around for the Best Rates
One of the most effective ways to save money on car insurance is to compare auto insurance rates and quotes from multiple insurers. Different companies offer different rates for the same coverages, so shopping around can help you find the best options.
Insurers nationwide will have policies with unique discounts and advantages based on driver history. Consider using an insurance comparison website to compare auto insurance costs among companies, identifying which coverage has the best benefits for your vehicle. Utilize your newfound knowledge of car insurance terms to select a policy that also fits within your budget.
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1-855-478-3705Bundle your Policies
Many insurance companies offer discounts if you bundle multiple policies, but what does bundling mean? Bundling is a term many businesses use to describe offering two or more services for a discounted rate. For example, combining your car insurance with home or renters’ insurance can lead to significant savings.
The most common bundling that insurance companies can offer are:
- Multiple vehicle auto insurance: Sometimes referred to as multi-car insurance, is when more than one vehicle is covered under a single policy.
- Auto and renter’s insurance: This bundle combines renter’s and car insurance, usually under the same provider.
- Auto and business insurance: This policy usually refers to combining commercial auto insurance with a business’s broader insurance coverage.
If you have multiple insurance policies under different providers, you typically won’t get the discount that combining policies under one provider can offer. Moving your policies over to one provider can help qualify you for a discount and get the savings you need.
Increase your Deductible
Deductibles and premiums are two terms that buyers should know when searching for auto insurance. A deductible is the amount you pay out of pocket before your insurance kicks in. Drivers can usually obtain a lower premium by getting a policy with a higher deductible.
Increasing your deductible can lower your premium, the amount a buyer owes for the insurance coverage. Depending if the policy extends for six months or multiple years, the driver will have a different premium total based on the time period.
If you choose to increase your deductible to get a less expensive premium, there’s one possible downside. A higher deductible can lower a buyer’s initial costs, but this means drivers assume more of the risk during a potential accident. This strategy would mean paying more out-of-pocket in the event of an insurance claim. If you don’t have sufficient savings set aside for an emergency, covering costs personally from a higher deductible may be difficult.
Take Advantage of Discounts
Insurance companies offer a variety of discounts that can help lower your premiums. Some standard discounts include:
- Safety driver discounts: For maintaining a clean driving record.
- Good student discounts: For students who consistently get good grades.
- Multi-car discounts: For insuring multiple vehicles with the same company.
- Mature driver improvement course discount: For older drivers who want to continue driving. By passing an introductory driving course, these drivers can save money.
- Safety features discounts: For installing anti-theft devices, anti-lock brakes, and airbags.
- Renewal discounts: Some providers will lower your costs when you renew your policy.
- Homeowner discounts: If you have a homeowner's insurance policy and the address on the policy matches your auto policy’s address, you may be able to save money.
- Paid-in-full discounts: For paying your insurance premium all at once instead of monthly.
- Advanced quote discounts: For drivers who don’t let their auto insurance policy lapse between months. Someone would typically only receive this discount for purchasing coverage with a future effective date. For example, paying for a policy that starts a week or more before the expiration of a driver’s current coverage.
Ask your insurance provider about discounts available to see what you can qualify for. Most providers will have relatively simple ways to save money on your premium.
Maintain a Good Credit History
Like it or not, your credit history can affect your car insurance premiums. Depending on what state you live in, insurance companies may use credit-based insurance scores to assess risk, with higher scores often resulting in lower rates.
To maintain a good credit history, you should pay your bills on time and monitor your credit spending. The long-term benefits of a good credit history extend beyond insurance rates, affecting loans, mortgages, and other financial aspects. Looking after your credit will not only help you get cheaper car insurance but will also aid in bundling policies, too.
Drive Safely and Keep a Clean Record
Your driving record is a significant factor in determining your car insurance premiums. When you get into an accident, your premium will likely escalate. Avoiding accidents and traffic violations will help keep your record clean and your rates low.
If you’re worried about your premiums increasing due to unsafe driving, consider taking a defensive driving course, which you can find locally or virtually. Attending a defensive driving course can help your road skills but also may qualify you for additional discounts from your insurance provider.
Choose the Right Vehicle
The type of vehicle you drive impacts your insurance rates. Generally, cars that are less expensive to repair and those with better safety ratings have lower insurance premiums.
Compact SUVs are an excellent place to start for vehicles that are typically cheaper to insure. SUVs, sedans, and trucks, which are not manufactured by luxury brands, commonly have less expensive policies since they are typically considered safer vehicles.
Lower premiums aren’t always offered for updated safety features, though. Cars with ADAS (Advanced Driver-Assistance Systems) like blind-spot detection and collision warning can prevent damage frequency but are more expensive to repair. Because of this, many insurance providers won’t provide discounts for advanced safety features.
Pay your Premium in Full
Paying your insurance premium monthly is a relatively standard procedure, but you can also receive a discount for prepaying. If you have the funds, paying your car insurance premium in full rather than in monthly installments is an excellent way to save money.
Many insurance companies offer discounts for paying an annual premium upfront. This approach not only reduces the overall cost of your insurance but also eliminates the hassle of monthly payments.
Review your Policy Regularly
Now that you know many terms and jargon associated with car insurance, you can use that knowledge to review your new policy.
After selecting an insurance option, you’ll likely have to renew, update, or change the policy in the future. Life changes like moving, getting married, or buying a new car can affect your insurance needs and premiums. Make sure you’re checking your coverage annually to see if the policies still work for you.
Another benefit of reviewing your policy annually is ensuring your insurance coverage is maintained. Minimum insurance policies often can change, making you and your vehicle vulnerable. It’s important to review your policy regularly to guarantee your coverage is still in effect for your vehicle.
Saving on Auto Insurance
Car insurance is a necessary expense, but it doesn't have to be a financial burden. Knowing how to save money on auto insurance is your best bet for combatting unnecessarily large premiums and costs. Regularly reviewing your policy, checking for auto insurance discounts, and maintaining good driving habits will ensure you have the coverage you need at a price you can afford.
A surefire way to help save money on your premium is by contacting an agent at Infinity Insurance Agency, Inc. By calling today, an agent can help you figure out an ideal insurance option for you. Get a free quote by calling 1-855-478-3705 today!