Auto Insurance

Auto Insurance Tips

All drivers are required to have auto insurance coverage on the vehicle being driven.  It is illegal to drive without auto insurance, not to mention the expense you would bring upon yourself, if an accident occurred.   But, of course, nobody wishes to pay more than they must for auto insurance.  Following are numerous ways to decrease, considerably, your auto insurance premiums.

Increase Your Deductible:

The amount of money for which you are responsible when you make a claim is called the deductable. The bigger the deductable, the smaller your monthly premiums.  You can save hundreds of dollars each year by opting to increase your deductable, but be cautious.  Should the need arise, make sure that some of those savings have been put aside to cover the cost.

Reduce Coverage:

It might not be financially prudent to pay for comprehensive or full collision coverage on an older vehicle of uncertain value.  In the event of a claim, the maximum the insurance company will pay out, is the book value of the vehicle.  It would be wise to cut back to a lower premium, if the book value of the car is too low to justify paying a lot of dollars for full or comprehensive coverage.

Consider Storage Insurance:

If you own a spare vehicle or one that is used for only part of the year sitting unused in a garage, this might be considered.  There is no need to purchase full price insurance for a vehicle when it is not being driven.   Think about acquiring a storage insurance policy which will provide coverage for any damage that might happen to the vehicle while in storage but not permit you to drive it.  Because the risk of an accident is substantially lower, the premiums charged for this type of insurance by insurance company is much less.

Get a Safer Car:

Numerous factors are considered when calculating auto insurance premiums.  The loss history of your model vehicle is one such factor.  This is determined by the quantity of claims filed for that particular type of car.  Car alarms, anti-lock brakes and other optional safety features often lead to discounts from numerous auto insurance companies.  Prior to purchasing a new vehicle, consider carefully the insurance costs that will be incurred. To make savings on premiums, it may be advisable to purchase a more expensive car.

Look for Discounts:

Diverse ranges of discounts are offered by different auto insurers.  Some of the discounts that you might qualify for include, good student discounts, safe driver discounts, or long term customer discounts.  If low mileage discounts are offered by your auto insurer, try to find creative ways to lower your mileage so that you can be eligible and ultimately save on gas as well.  Some auto insurers provide discounts for voluntary driver safety courses; check for availability of such courses and save.

Pay in Full:

Most drivers pay their premiums on a monthly basis, and if you do so, you are in fact paying in excess of what you owe.  Paying premiums every six months or once a year provides substantial savings, so inquire of your insurance agent if this can be arranged.  Organizing your finances to  fit in these large lump-sum payments in lieu of  smaller payments each month, can be challenging, but the money saved in the long run, far outweigh the problems associated.

Usually the premiums on auto insurance are worked out based on a formula that evaluates a number of risk factors. Costs are affected by a number of items such as vehicle type, driving record and age, causing premiums to increase. Costs may be reduced by factors such as driver improvement courses or installation of security devices.
The age of individuals is one of the main factors taken into account when the calculations for auto insurance are done. Older more mature individuals pay substantially less for coverage than adolescents and teenagers. The justification for this is the fact that adolescents usually have less experience driving, and are more likely to have more automobile accidents due to irresponsible or immature decisions.
Auto insurance premiums are also affected in a big way by an individuals driving record. If an excellent driving record is retained for an extended period, the driver may be pleasantly surprised with lowered auto insurance rates. Conversely, drivers might be rewarded with increased insurance premiums if they are found guilty of even one traffic violation. Understandably, individuals with several traffic violations are almost guaranteed a higher auto insurance rate.
Driving related factors are not the only ones that affect an individuals auto insurance premium. The type or make of a vehicle is also a factor of major importance when considering the premiums for auto insurance. Higher insurance premiums are required for vehicles that are frequently stolen, expensive to buy or expensive to repair. Bear in mind that an insured vehicle is the legal responsibility of the insurance company even while not being driven as any theft or damage has to be covered by that insurance company.
Another factor that can cause a driver to be charged high insurance premiums or be allowed concessions, is location. Drivers who reside in small, quiet rural towns are likely to be charged lower rates than drivers who live in cities. This is due to the fact that drivers in quiet, small towns are exposed to lower risk of theft or vandalism and to better driving conditions. Individuals who are pro-active and install security/safety features to protect their vehicles may be rewarded with decreased auto insurance premiums while those who don’t will not receive that benefit. Drivers could actually save some funds by simply using a manual anti-theft device or installing a security alarm. Individuals who store their vehicles in a garage are also subject to lowered rates by some insurance companies.
It is vital that drivers appreciate that even though insurance companies are liable to pay, insisting that companies do so, can ultimately lead to drivers being required to pay more also. Individual’s auto insurance premium are directly impacted by the number of claims filed. It is of no consequence whether the claim filed is a non-driving one, such a tree branch falling on the vehicle, or a driving matter such as a car crash.