Monday, January 7, 2013

More Ways to Lower Your Car Insurance Costs

A car crash on Jagtvej in Copenhagen, Denmark.
A car crash on Jagtvej in Copenhagen, Denmark. (Photo credit: Wikipedia)
Owning and maintaining a luxury car is not a joke these days. There are so many hidden costs that you don’t take into account when you decide to buy a car. Rising gas prices, regular servicing and maintenance and insurance premiums can leave you with a hole in your pocket. 

However, car insurance is one aspect which, if carefully thought out and planned, can prove economical and save a lot of your money. Most of us have a very sketchy idea about car insurance policies, and get intimidated by the technical jargon it involves. Here are a few simple tips on how to lower car insurance costs.

For starters, it’s important to shop smart. Compare auto insurance quotes from at least three to four trusted companies. You could also log onto insurance comparison sites to evaluate which company best suits your needs of premiums, cover, services and pricing. Premiums can vary widely based on the make, model and year of a vehicle.

Make sure you provide the insurance company with complete information, especially that which could work in your favor and lower your premium, such as your age, your profession, safety features on the car, your marital status etc.

It’s also a good idea to group all of your insurance policies – auto, home/renters, health, etc. – at one insurance company, in order to earn a multi-line discount. Insurance experts say you could save at least 10% of your total premium this way.

It is believed that raising your deductible (the amount you pay out of your pocket in case of damages before the insurance company kicks in) can significantly lower premium costs. Decide how much you can afford to spend out of pocket, and then adjust your deductible accordingly. This works well for safe drivers with good past records and people who don’t drive their car very frequently.

Safe drivers are rewarded with a better insurance premium. Avoid speeding and stay out of accidents, and you'll save 5% or more on your premium. The ‘good driver’ record really looks great on your report card and subsequently on your insurance premium. Most companies will further reduce your rate every time you go three years without any traffic violation. Also make sure you pay your bills on time and improve your credit score.

Most people are of the opinion that monthly bills are a good idea when it comes to their car insurance. However, experts say that this is just a tactic by the companies to generate income and cash flow on a regular basis. You will end up paying for the convenience with add-on fees without even realizing it. To avoid these extra charges, request to be billed every 6 months or yearly instead. If a large bill in one go makes you worry, then set up your own monthly bill pay and deposit that amount into your savings account each month. When the bill comes due, your money will have accumulated safely.

Your auto insurance probably comes packaged with a lot of extra stuff that they just throw in and most people don’t bother to read. Sometimes there are things in it that you don't need--roadside assistance and car rental coverage being two possibilities, depending on your lifestyle and situation. Go over your insurance policy line-by-line, and ask about removing any coverage that you don't need.

If your car is old and you have paid the loans for it, you could consider eliminating your collision coverage. This is the coverage that pays for any damage that you cause to your own vehicle, and it makes up a big portion of your insurance cost.

Author Bio: 

John works for an insurance company and also contributes to a number of websites in his free time. He enjoys writing about comparing auto insurance quotes, life insurance, travel and health insurance. He is a spirited traveler, a nature lover and an adventure enthusiast who enjoys the thrill of extreme adventure sports such as skydiving, hang gliding, scuba diving and river rafting. 


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