10 Easy Ways to Save Money on Car Insurance

A guest article by Jaime Netzer from The Zebra

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On the spectrum of unpleasant errands, shopping for car insurance probably falls somewhere between the visiting the dentist and returning Tupperware to your mother-in-law. But comparing prices and coverage options can save you serious cash—experts estimate that consumers overspend on car insurance by about $368 per year. Aside from shopping around (which you should absolutely do), there are some truly simply steps you can take to keep your premium low and more money in your pockets:

  1. Always carry continuous auto insurance. The longer you keep continuous auto insurance without a break or lapse in coverage, the better your rate becomes. Even if you don’t have a car, carry a non-owners policy. And the higher the liability limits you choose to carry, the more discounts you’ll be eligible for every six months. Even if you were just a driver on someone else’s policy you still qualify for these discounts. By all means, shop around for car insurance, but make sure you’ve started your new policy before cancelling your old coverage.
  2. Maintain a good credit score, or do your best to improve yours. With only a few exceptions, it’s legal in most states for insurers to use a driver’s credit score to help determine their car insurance rate. This is because companies have found through their predictive models that folks with solid credit ratings also tend to file fewer claims. It may not seem fair, but it is the way things work, so keep your eyes on your credit score through great free services like creditkarma.com and work to pay down existing debt, pay bills on time, and if necessary, see a credit counselor.
  3. Got a young driver or are a young driver? Hop on a family member’s policy. Age carries significant weight in car insurance rates, so until you turn 25, it’s a good idea to hop on an older driver’s policy—no matter who pays the bill.
  4. Drive an older vehicle? Consider dropping collision but keeping comprehensive coverage. Collision coverage tends to be more expensive than comprehensive coverage. Comprehensive, on the other hand, is fairly affordable for older vehicles and offers a lot of very valuable protection for your vehicle. Comprehensive claims are a lot more common than a collision claim, and you can assume higher risk to save money.
  5. Buying a new car? Do your homework on insurance before you ever set foot on the dealer’s lot. You already know that your car insurance rate varies depending on the year and model of car you drive, so the last thing you want is to find yourself stuck in the lot so blinded by your love for a new car (and so desperate to drive it off the lot legally insured) that you over-buy on coverage or don’t take the time to find the best possible carrier for your needs.
  6. Work close to home—or use public transportation to make your way to work. If you only use your car for pleasure, your insurance rates will be lower, and on top of that, you always will be less if you drive fewer miles per year. The average miles driven per year is between 12,00 and 15,000; if you can get yours down to under 6,000, you might be able to see some discounts. There’s a caveat here, though: Most of the time, the company will need proof. (For example, Progressive offers the discount but requires you to install their Snapshot  device in order to verify that you’re actually not driving all over tarnation.)
  7. Check out your health insurance policy to see where you might have overlaps. Contact your health insurance company to see what type of coverage you have for yourself in the case of an auto accident. If your health insurance will provide benefits in the case of an accident, you may not need to carry such high limits on your car insurance policy. The same is true if you have life, or disability insurance: You may be paying for double coverage.
  8. Be aware of your motor vehicle record. Generally speaking, accidents and tickets no longer factor into your car insurance rates after three to five years. If you know you’ve been in an accident or received a ticket, note the date and make plans to follow up with your insurance company as soon as three years have passed— you want to notify your insurance company immediately and see if they will remove it to help you get a better rate immediately.
  9. Only pay for the coverage you really need. If you’ve paid a car off in full and it’s older, it may not make any financial sense to carry comprehensive and collision insurance—you may just need liability. When in doubt, a licensed agent can help you determine the best coverage for your needs.
  10. Last but not least: Review your options every six months. The unfortunate truth about car insurance is that customer loyalty doesn’t always pay. The other, much more fortunate truth is that it’s not that difficult to compare your options. At sites like www.thezebra.com, you can compare rates anonymously and in just sixty seconds. Then all that’s left is breaking up with your old company and slipping into a shiny, new policy—it’s not that hard to switch car insurance companies, either.

Thanks Andrew Stawarz for the photo.

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