How To Lower The Cost of Your Car Insurance

It’s a common complaint – “My auto insurance costs too much!” But it may not have to be that way. There are several easy steps you can take to save money on your car insurance. Here are tips.

Compare rates from many companies

Rates for the same coverage vary between insurance companies, so shop around for low rates (some states regulate rates, so prices won’t differ). Even if you compared costs when you first bought insurance, it’s smart to shop again when it’s time to renew your policy. Many companies set rates based on their financial results from recent years. If an insurance company had recent high losses, their rates can go up a lot.

There are many ways to shop around. Call companies directly for prices or get quotes from their websites. Ask your friends and co-workers for recommendations. Also check consumer magazines and consumer organizations. In addition, many state insurance departments provide rate comparisons on the internet, making it easy to get a good idea which companies may be best suited for you.

When buying auto insurance, don’t automatically pick the company with the lowest rate. Make sure the company is in good financial condition. Two major companies that offer ratings for insurance companies are A.M. Best (www.ambest.com) and Standard and Poor’s (www.standardandpoors.com). Also make sure the insurance company you buy from offers good service. Many state insurance departments provide information on complaints about insurance companies.

Increase the deductible

Deductibles are the amount of the loss which you are responsible to pay before the insurance company pays. Raising “collision” and “comprehensive” deductibles can lower the cost of your insurance. “Collision” covers damage to your car in an accident, and “comprehensive” covers damage to your car from fire or theft. If you have an older car that has lost much of its value, consider raising the deductible for collision and comprehensive. Just raising it by a few hundred dollars can lower your cost for collision and comprehensive coverage by 25% or more.

Consider the car

Car models that are stolen more often or that have bad safety records cost more to insure. So before buying a new or used car, find out which makes and models will fit your insurance budget. A good source for safety information on many cars is the National Highway Traffic Safety Administration. Their website is www.nhtsa.gov.

Buy home and auto insurance from the same company
Many insurance companies will lower the price for your car insurance if you also buy home insurance from them. If your insurance company offers this, be sure to still comparison shop to make sure you are getting the best deal on both types of insurance.

Take advantage of available discounts

A good way to lower the cost of your car insurance is to take advantage of discounts insurance companies offer. Discounts available to drivers vary from company to company, but common are: discounts for cars with safety features like anti-lock brakes, anti-theft features or air bags; discounts for good drivers (no accidents or moving violations over a certain time period); discounts for people who work close to home; discounts for insuring more than one vehicle with the same company; and other types of discounts, like discounts for students with good grades or discounts for people who take driver training or defensive driving courses. Ask your insurance agent what discounts are available for your situation.

These are some of the best ways to cut the cost of your auto insurance. When trying to lower the cost of your car insurance, it is vital that you do not eliminate or lower your uninsured and underinsured motorist insurance. These types of insurance are inexpensive and are necessary to protect you in case of an accident with a driver who has no or too little insurance to pay for your injuries. Without them, you may suffer the same tragedy as that of many other auto accident victims — not being able to recover money for all your injuries.