How to Save Money on Auto Insurance
A typical auto insurance policy can be a big out-of-pocket expense, costing several hundred dollars a year. Regardless, you should never drive without auto insurance. Most states require minimum amounts of liability coverage, but many drivers feel more comfortable purchasing higher limits of coverage.
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Ways to Reduce Auto Insurance Premiums
Understanding the factors that affect your auto insurance rates can help you get the best coverage and save money. Read on to find out how you can stretch your dollar to get the maximum amount of insurance protection.
- Check your credit history.
Many insurance companies use your credit score and history to determine your auto insurance rates. Statistical research has shown that individuals with high credit scores have a lower accident potential, and thus, pay less for auto insurance. You should check your credit history at least once a year for inaccuracies, as these can also have a major influence on your rates.
- Maintain continuous auto insurance coverage.
Drivers who have gaps in their auto insurance coverage are considered more risky than those who have maintained continuous coverage. A lapse in auto insurance coverage can mean higher rates in the future.
- Buy a "low-profile" car.
High-profile cars are usually more expensive to repair and generally have a higher theft rate. Thus, they are seen as a higher risk to insurance companies. Owners of flashy vehicles, such as sports cars or convertibles, will usually pay more for auto insurance than owners of less-expensive cars, such as 4-door sedans or minivans.
- Shop around.
Research your auto insurance options so you can make the best decision when buying a policy. Check to see if other companies offer more competitive rates for the same coverage. Many insurance company web sites allow you to compare their rates against their competitors' rates and get multiple quotes for different policies.
- Ask about discounts.
Auto insurance discounts may be available to individuals who meet certain criteria. You may be eligible for a discount if you insure multiple cars on one policy, or if you purchase multiple types of insurance from the same company. Check with your auto insurance company to see what types of discounts are available to you.
- Drop collision and comprehensive on older cars.
It may be more cost-effective to drop collision and comprehensive coverage on older cars whose worth is less than what you would ever collect on a claim. You can reference the Kelley Blue Book to determine you car's worth.
- Consider higher deductibles.
A deductible is the amount of money you must pay when you make a claim. Auto insurance companies require you to pay your deductible in full before they make any payments for damages. Increasing your deductible may mean higher out-of-pocket expenses should you make a claim, but doing so will lower your monthly premiums and may allow you to purchase higher limits on your policy.
- Drive less.
You may qualify for a low-mileage discount if you drive less than a pre-determined number of miles a year. The less you drive the car, the lower the risk that you will be in an accident.
- Keep your car in a garage.
Keeping your car in a garage makes it less likely to be vandalized, stolen, or hit by another vehicle.
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**Auto Insurance Finder is not an insurance broker or carrier. Content on this site is for comparison and informational purposes only. The products and services listed on this site may not be available in all states.
Last Updated: February 14, 2008
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