In nearly every state, the law requires auto insurance for drivers. But it can get very pricey. The typical American driver spends more than $1,000 per year for coverage. And the number of different coverage options can be dizzying.
Whether it is a matter of cutting back on the little extras in your policy or doing better comparison work before you buy, these 7 car insurance savings tips can help reduce your expenses:
1 – Eliminate the tow option on your policy.
Towing protection is an optional coverage offered by many different insurers. The average tow costs about $100, which you could probably save up for on your own rather than pay up to $30 extra each year for the rare chance your car could break down.
2 – Take the risk for higher deductibles.
It is a bit of a gamble, but if you have a safe driving record and feel comfortable with it, sign up for a higher deductible. Your insurance rate will go down and you will only notice the difference if your vehicle sustains damage above your prior deductible.
3 – Don’t pay for car rental coverage through your insurer.
Car rentals usually cost around $25 a day for a small vehicle, and you may be able to get a ride with a coworker, friend or family member. Considering you may pay $20-40 each year in case you need a car rental and never actually need it during the lifespan of your car, you could be paying much more than you will ever need for a car rental in the event of a collision.
4 – Shop around.
This cannot be emphasized enough; it is an absolute must when it comes to buying insurance. Though you may love one company’s commercials or think that some of its perks are great, you need to know what you are getting for your money and what you could get elsewhere for the same amount — or even less.
5 – Consider all-in-one packages.
Some companies will offer deep discounts to customers who hold multiple policies through them. Consider the possibility of bundling your car and house insurance, for example, from the same company. You may find you save more on both by doing so. You could save even more by adding life, boat, or other insurance coverage.
6 – Pay in lump sums.
If you pay monthly, you will almost certainly pay around $30 more per year for your policy than you would if you paid annually or every six months. Insurers charge you fees for the convenience of monthly payments, and over time, they add up. Some insurers even offer deep discounts paying the full policy term up front.
7 – Be a safe driver.
If you avoid speeding and the citations that go with it, your rates won’t take a hike. Some insurers even offer tracking devices to monitor how, when and where you drive. You may also want to consider a safe driving course, which could result in discounts on your existing policy.
These 7 car insurance savings tips truly could lower your policy by hundreds of dollars, without sacrificing much in the way of coverage. While savings is great, other factors such as customer service, claims service, and company financial strength should also be considered when choosing an insurer.
About the author: Jason Nelson contributed this article on behalf of DiscountCarInsuranceQuotes.net, where you can learn more about the top car insurance discounts and get free quotes to compare rates from leading insurers.
Credits: Photo courtesy of Mike Jonson.