If you’re not with an independent insurance agency, there is a good chance that you are paying too much for your car insurance.
There are lots of ways to save money on car insurance, so why not take a moment and ensure you’re getting the best value for your dollar?
Cover What Your Car is Worth
If you have a car that’s not worth much (a good rule of thumb is $1,000 or less), or an older car, there’s not much point in getting collision and comprehensive coverages. The monthly cost and deductible usually end up being more money than the car is worth. The cost of car insurance tends to outweigh the benefit.
There are a number of car insurance discounts available. The reasons are varied, but here are a few examples:
- Low-risk occupations (such as teachers or engineers)
- Professional organizations
- Recent completion of Defensive Driving course.
- Car safety features, such as: Air bags, Anti-lock brakes, Anti-theft devices, Lo-jack, etc.
- If the driver is a good student
- Senior citizens
Make sure you are taking advantage of all thecar insurance discounts available to you! It never hurts to ask!
Combine Your Insurance
Most companies offer multi-policy insurance discounts, often around 10%. Make sure you talk to your Balcos agent about getting multi-policy discounts.
If you have multiple cars, motorcycles, homes, or have renters insurance, make sure they’re all insured with the same company! If you don’t, you’re probably paying too much and don’t have the best insurance for your needs.
Never let your car insurance policy lapse. If it expires, you will be left without coverage for that period and may find it difficult to obtain affordable car insurance again. Car insurance is a business of statistics. Customers who let their insurance expire—even for a couple days—are statistically higher-risk, so often get charged extra.
It’s a simple. If you’re a good driver, you’ll often get a better price on car insurance. There’s even discount car insurance available to most people that qualify as “good drivers.”
Car insurance companies categorize drivers into types – “worst,” “middle,” and “best.” Each type of driver typically gets insurance with a different type of company. But many people get lumped into the “middle driver” type.
Most people in the “middle” have driving records that are about the same as the “best” drivers, but don’t get discounted car insurance premiums. If your driving record is clean, you probably have access to an affordable car insurance policy. It pays to be a safe driver!
If you don’t drive it, don’t insure it. If one of your cars broke down and has been sitting in the backyard for a year, make sure it’s not still on your car insurance policy. Keep in mind, though, that many states require that you have any registered vehicle insured, so if you drop car insurance you may want to register the vehicle as “inoperable” to avoid any complications or penalties. Only drop a vehicle from your auto insurance policy if you’re sure you’re not going to be driving it for a long time.
Bus It Up
You pay more if you drive to work. And the more miles you drive, the more you pay in car insurance. You may want to weigh out your costs & benefits; how much you pay for insurance against the cost of a bus pass, and the savings in gas.
Something else to take into consideration is how much you get paid per hour versus the amount of time you’d spend on the bus, or in your car stuck in traffic. When you add up all the changes in time and cost, it is often much more affordable to use a form of mass-transit to get to work.
Pay Up Front
Buy a longer car insurance policy. Sometimes you pay processing fees or price penalties if you have short policies or pay monthly. The longer your policy term, and the more you pay in lump sums, the cheaper your car insurance rates will likely be.
If installments are the only affordable option, you may be able to avoid fees by having your premiums automatically deducted from your bank account each month. Another option that many companies offer is larger installments – instead of a monthly fee, you can pay two-months worth every two months to avoid some of the fees. Talk to your Balcos agent to see what they can do for you.
Low Mileage Drivers
Insurance companies use “average use” to help them decide whether individual drivers will pay more or less for their insurance. This is usually 400 – 1,000 miles per month. If you drive less than the average, you can sometimes qualify for low-mileage car insurance discounts.
Monitor Your Teen Driver
Some car insurance companies have programs that monitor teen drivers – and some even offer discounts for participating. Some programs use cameras that provide you with video and audio footage of your teen driving. The camera is triggered “on” by aggressive driving. Others use global positioning systems (GPS), which tracks:
- How your teen drives
- Sudden braking
- Fast acceleration
- Where they go
This may help you open discussions with them about their driving, and helps ensure that they will drive safely (if not because of your words, because they have the feeling that “Big Brother is Watching”). You can even set the system to send you an e-mail or text message when your teen arrives at a specific address.
Waiting to Drive
Young, newly licensed drivers are the most prone to car accidents. As a high-risk group of people, you will pay more to insure them. If they get their drivers license, you must pay the extra premium. Though it may be difficult to make them wait, if your car insurance bills are already an issue, it might be your best option.
If they already have a driver’s license, you may be able to exclude them from coverage by signing an exclusion form. Normally, car insurance rates go down a little after the driver turns 18, and the price plummets later, usually at age 21 and/or 25.
Type of Car
What kind of car you drive makes a big difference in how much you will pay for car insurance. Is it a Sport or Racing edition? Is it a car that is targeted by theives? Is it expensive to repair?
These are all factors that cause the price of your car insurance to skyrocket. If you haven’t bought a car yet, but have one in mind, get a car insurance quote from your agent specific to that type of car.
For detailed information contact the Insurance Institute for Highway Safety and request a “Highway Loss Data Chart.”
Assume More Risk
You pay a deductible when you have an accident/loss. This is your responsibility to pay before your insure will kick in.
Let’s say you have an accident that causes $500 in damage, and your deductible is $100. You pay the $100 (deductible) first, and then the insurance company pays the rest.
- If your deductible is lower, you pay more for insurance.
- If your deductible is higher, you pay less for insurance.
This is because you are taking more of the risk upon yourself. If you have the money to afford the additional cost and are a safe driver, you can probably afford to pay more in the event of an accident and less monthly. This is often less expensive in the long run.
Professional Organizations, Memberships, Clubs & Associations
Find out if you qualify for any group plans. For example, if you are an alumnus of a college or university, or a member of a professional organization, you may qualify for a discount or a special group plan with one or more insurance companies.
Location, Location, Location
If you’re planning a move any time soon, don’t forget to factor in the cost of car insurance. Typically:
- If you live in a rural area, you pay less for car insurance.
- If you live in an urban area, you pay more for car insurance.
- Costs can vary, even within a community.
- Rates vary greatly depending on which communities, cities, or states you plan on moving to.
Discounts are available by many companies to those who have completed a Defensive Driving Course recently. Typically, this is within the last three (3) years.
Many insurance companies use your credit history as a tool to finding out how great a risk you are. If your credit report is in good standing, you may be able to get discounted car insurance premiums by insuring with a car insurance company that uses credit reports as a rating factor. Or, if you have a messy credit report, switching to a company that doesn’t use credit history might be advisable.