How to Get a Good Deal on Car Insurance

Posted on Thursday, September 10th, 2009 at 5:11 pm in Financial Planning

Car insurance is one of those things you just can’t do without. You can save money and stay protected if you just shop around and take a few other measures to lower your risk profile, however. Here are some of the things you can do to lower your auto insurance premiums:

Do your homework: Before you start calling insurance agencies to get quotes for insuring your car, prepare a list of questions. A recent survey of agents found that the majority neglected to inform prospective clients about discounts and deductibles that could have reduced their premiums by up to 40%. You’ll also want to check out each insurance broker in Best’s Insurance Reports: Property-Casualty at your local library, or with your state insurance office.

Compare premium costs: Auto insurers are notorious for charging different rates for the same coverage, with available premiums varying by up to 100% in some areas. Shop around, starting with a large firm like State Farm or Allstate and use their quotes as a benchmark to judge near-identical policies at other companies.

Manage your teenagers’ driving: It’s expensive to insure young drivers, especially as the principal driver of a vehicle, although rates do drop once they turn 25 or get married. Good students often get a discount (5-25% off for a B average is typical), as academic achievement has been proven to equal careful driving. They can also get a break for completing a drivers’ ed course.

You should drive carefully too: If you’ve had a clean record for three years, you should be able to get a 5% discount, and 10% off for six years without an accident or traffic ticket. Some companies give price breaks for non-smokers, women who are the only drivers in their households or seniors. Carpoolers often get discounts of 15-20% because they don’t drive every day.

Check the car’s rating before buying: Some models are involved in more accidents than others, or are stolen more often. These cars will cost more to insure, no matter how well you drive.

Consider increasing your deductibles: Select the highest deductible you can afford, with a view to paying for minor damage yourself. This can save you quite a bit on your premium.

Reduce the coverage on an old car: If your car is more than five years old, and depending on what it’s worth, it might make sense not to pay for comprehensive and collision coverage. Your risk would rise, but remember the insurance won’t cover more than the value of the vehicle.

Insure all your vehicles with the same company: You’ll get a discount for including multiple cars on one policy. You should also check into available discounts for buying other policies from the same company, for example to cover your home.

Don’t pay monthly: It’s always cheaper to pay your annual insurance premium in one lump sum than to split it into monthly or quarterly payments.

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