Everyone wants to lower their bills and reducing your auto insurance premium is a great place to begin. Watching the television would have you believe that all it takes is a quick phone call or a visit to the internet to save hundreds of dollars. But with a little homework, you may be able to lower your premium without sacrificing coverage.
It is essential to understand that cheap insurance may not be the right insurance for you or your family’s needs. Aim to obtain the best coverage that fits within your budget. Doing so will make your wallet happy today and prevent any surprises later if you are involved in an accident. Here are five ways to start saving money today.
Be Loyal
Loyalty means different things to different people. For insurance companies, loyalty equals profit. As in most industries, the cost to acquire new customers dramatically outweighs the cost of retaining a customer.
Use this to your advantage when contacting your insurance agent. Although the length of time you have stayed with a single insurer is a consideration, so too is on time payments and a relatively good driving record. Asking for a loyalty discount is often the quickest way to reduce your premium.
Age Gracefully
Your age is an underlying factor in calculating your insurance premium. It’s common to see a significant premium reduction when reaching the age of 25. Some insurers may even provide discounts for ages under 25 at regular intervals such as 18, 21, or 23.
Older drivers can also benefit from potential discounts. If you are retired and over the age of 55, there are insurance companies offering a retiree discount. Retirees typically spend fewer miles on the road, reducing the exposure to the insurer.
Get Educated
If you are a student, getting and maintaining good grades is a surefire way to obtain a discount. Whether in high school or college, a good grade discount may be just enough incentive to keep hitting the books.
For those who have graduated from high school, college, or both, consider taking driving courses. Ask your insurance agent if there are driving courses in your area that may apply toward a policy discount. Obtaining a discount would be a bonus as the skills learned could be lifesaving.
Purchase the Right Coverage
The fastest way to reduce your premium is to carry the State required minimum limits. Unless absolutely necessary, this approach is a recipe for financial disaster. Instead, review your policy’s coverage terms and deductibles to build a solution that fits your needs.
Deductible – Raising your deductible will reduce your premium. If your financial plan provides enough emergency funds to cover a higher deductible, this is a logical step in reducing your premium.
Comprehensive and collision coverage – If your vehicle is a “beater” and serves as pure transportation, consider dropping comprehensive and collision coverage. This approach is recommended only for situations where you can replace your vehicle on your own if it were stolen or totaled in an at-fault accident.
Rental reimbursement – If you have a second mode of transportation to use while your vehicle is in the shop for repair, consider foregoing rental reimbursement coverage.
Increased personal injury protection – A good health insurance plan can be an alternative to the increased cost of additional personal injury coverage.
Ask for Discounts
There are myriad of discounts available that you should be asking for from your agent. Most revolve around life events such as:
Getting married
Moving
New home purchase
Adding or removing a driver
Purchasing or selling a car
Unless you let your agent know, you may be missing out on these possible discounts. Anytime there is a significant change in your life, consider contacting your insurance agent to see if any discounts might be available.
Go Shopping
Finally, when it comes to shopping for your insurance, you have a few options. Independent insurance agents can provide quotes from many different insurers. They will present the most options with the least amount of effort on your part.
However, with a little extra time and effort, use captive insurers and the national carriers as a barometer to ensure you’re getting the right insurance solution from your independent agent. The reverse is also true if you’re already insured a captive or national insurer. When comparing, make sure the quotes you review are providing the similar coverage terms.