14 Ways to Save on Auto Insurance

Insuring your car is a necessity that can seem expensive if you don't know ways to cut back the cost.

Car insurance is vital to your financial health and legally required in most states. But how much coverage you're required to carry and how much you need can be two different things. You want to be certain you have enough coverage in case of an accident, but you don't want to be paying for coverage you don't need. Insurance can be expensive, if you have more coverage than necessary.

Auto insurance covering liability for injuries and property damage done to others is compulsory in most states. New Hampshire, for example, doesn't require motorists to carry liability insurance, while residents of Virginia must pay the state a $500 annual fee per vehicle if they don't carry liability insurance.

Check out these 12 tips to ensure you're doing all you can to get the right coverage at a fair cost.

1. Shop Around
Insurance companies' rates will vary depending on where you live. Different companies could have better rates for different vehicles or zip codes. One company could have the best rates for your needs one year and raise them the next. It pays to shop around each year before automatically renewing your policy. Be sure you receive at least three quotes for exactly the same coverage.

2. Only Buy The Coverage You Need
Depending on your assets and personal preferences, you may wish to reject certain coverages, such as personal injury or uninsured motorist protection. You might not need as much liability coverage as years go by. For example, if your car isn't worth much, you may be better off dropping coverages that protect against theft or damage. You might also drop collision coverage. However, make sure before dropping such coverages you can afford to repair or replace the vehicle out of your own pocket.

3. Increase Your Deductibles
You can save significantly by bearing a greater portion of the risk. Just be sure covering costs resulting from an accident out of your own pocket won't put you into severe debt. Most policies include a deductible amount which you'll pay out of pocket before coverage kicks in. The higher your deductible, the lower the price for that coverage. Get quotes for higher deductibles to see how much you could save. Make sure you can afford to pay your deductible, in the event of an accident. A $1,000 deductible, for example, may be substantially cheaper than a $250 deductible, but you’ll have to pay $750 more in the event of an accident.

4. Invest in a Longer Policy
In most cases, the longer the policy term, the cheaper your rates will be. Three or six-month policies could end up costing more than a 12 month policy. But regardless of the length of your policy, you may save money by paying for coverage up front, instead of in monthly installments.

5. Stay Insured
Allowing your insurance to lapse can make raise your rates when you do instate, as well as making it more difficult to obtain insurance. Once your insurance expires, you're considered a higher risk and insurance companies usually charge extra.

6. Don't Insure Vehicles You Don't Drive
If a car has been sitting in your garage for a year waiting for repairs and you don't plan on fixing it any time soon, don't waste your money to insure it. Just be certain you won't be driving the car for the duration of your policy. Keep in mind you'll most likely still need to register this vehicle. Make sure the car is parked off the street, in a place where it likely won't be damaged.

7. Drive Safely
Accidents, especially accidents where you're at fault, will increase your monthly premium for three to five years. If you haven’t had an accident in a while, be sure to ask your agent if you qualify for an accident-free discount. If you get into a minor collision, especially if your vehicle is the only one involved, you may want to pay out of pocket instead of reporting a claim, particularly if the cost for repair doesn't meet the deductible. The amount you pay in accident surcharges can be more than the vehicle repairs. Also, drive defensively and safely to avoid tickets as each ticket impacts your premium.

8. Make Your Car Safe
By driving a "low profile" car and having certain safety features, such as an anti-theft system, some insurances will provide discounts up to 36 percent. High-profile cars include brightly colored, high-performance and more expensive vehicles. Service your car routinely to ensure its safety. Purchasing a vehicle with such auto-safety features as anti-lock brakes will also lower your payments.

9. Join an Auto Club
Affiliation with AAA and certain other professional organizations will lower your rates. Ask your employer and insurance agent if they offer group insurance rates.

10. Drive Less
Driving less yields substantial discounts, particularly if you have a short commute to work or don't commute during morning and evening "drive times" when traffic is heaviest. Some insurance companies offer up to a five-percent discount if you drive less than 7,500 miles per year, and up to 10 percent if your annual mileage is under 5,000.

11. Take a Driver's Training Class
Most companies offer discounts for pre-approved driver-training courses, especially for teen drivers. Check your insurance before investing a lot of money in such a course. But no matter your age, lessons from a professional can save money by helping you become a safe driver.

12. Bundle Policies
Combine policies to cover your home and all vehicles for a substantial savings. If your children have their own cars, consider including them in your policy and having them pay a portion of the premium. Don't forget to include recreational vehicles and boats.

13. Renewal Discounts
Make sure you receive a "renewal" discount, if available. This is a discount given those who have been with the same insurance company for an extended period of time.

14. Occupational Discounts
Strange as it may seem, some companies offer better rates for those in professions they see as low-risk. For example, studies show engineers and teachers have fewer accidents and, as a result, are eligible for cheaper premiums. Non-smokers also receive better rates. Maybe they figure non-smokers are less likely to be distracted by the mechanics of smoking while driving.

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Usually, the minimum required by law is protection to cover third parties against the financial consequences of loss, damage or injury caused by a vehicle.

Posted by Carina

Auto insurance covering liability for injuries and property damage done to others is compulsory in most states.

Posted by Carina