Seven Ways to Save Money on Car Insurance
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When you first took out your auto insurance policy, you probably evaluated your needs, shopped around for the best rate and checked your eligibility for discounts. But have you done any of that since?
It’s a worthwhile exercise to reevaluate your insurance policy as your car ages and your driving record and habits change. Information becomes outdated, deals and discounts change and your coverage needs shift. Here are seven ways you might be able to save money on your car insurance policy:
1. Reevaluate your existing coverage. Make sure you’re not paying for more auto insurance than you need. If your car is older, for example, it might be time to drop your comprehensive and collision coverage. These types of insurance policies are expensive and may not be worthwhile, so do the math: How much are you paying annually, how much is your deductible and how much is your car worth? You should only carry comprehensive and collision coverage if the annual premium is no more than 10 percent of your car’s current Kelley Blue Book value. If your car is worth less, you may be able to save money by switching to the cheaper, state-mandated coverage.
2. Bundle your policies. If you haven’t looked into combining your car and home insurance under one carrier, now is a good time to do so. Some insurance companies reduce their premiums by as much as 25 percent for customers who bundle their policies.
3. Claim discounts for which you’re eligible. Ask your insurance provider for a list of every discount it offers—for seniors, teachers, veterans, good students and those with clean driving records, for example—and see if you qualify.
4. Make sure your insurance rates are based on accurate information. If you’re driving less or if a previous accident recently came off your record, you may be able to save money on your car insurance. Start with a thorough review of your insurance policy to make sure the information your agent has about you is up to date.
5. Don’t be afraid to ask for a better deal. Research competitors and gather a few quotes. Although you may find a great deal elsewhere, you’ll at least be able to use that information to convince your current insurer to offer you a better rate.
6. Raise your deductible. The higher your deductible, the lower your premium will be. Raising your deductible could save you quite a bit on your premium (unless you’re an accident-prone driver). However, keep in mind that if you do get in a wreck, you will have to pay the deductible amount out of pocket in order to get your car fixed. Make sure you have enough cash in your emergency fund to cover your deductible if you need it.
7. Maintain a good credit history. Car insurers increasingly check their clients’ credit history when determining their rates. Review your credit reports to make sure there are no errors and practice good credit habits.
If you haven’t done so in a while, take time to look at your current auto insurance policy and to research others. You may be pleasantly surprised to find new savings options available.