Whether you have a set of shiny new wheels or a decaying rust bucket, cheap car insurance is a must for staying legal on the road. The good news? You have more control over factors that influence your car insurance rates than those that affect other types of coverage, such as life insurance or home insurance. In this guide, I’ll outline seven strategies that will help you save on car insurance.
In a nutshell, those strategies are:
The best way to begin, is just by getting a feel for different car insurance rates. Even if you don’t know what type of car insurance you need, it is beneficial to get a handle on how much insurance costs so you can budget. The online comparison tool below is the best place to start.
Once you’ve seen some rates, you need to dig in on discounts – the key to cheap car insurance rates.
Where to Find Car Insurance Discounts
Many car insurance companies have discounts that go beyond bundling or insuring multiple vehicles. There over 15 discounts offered by major car insurance companies and some of them are less obvious than you may think.
Driving Schools
Driving education is an often overlooked discount opportunity. Teen drivers are very expensive to insure but one great way to lower that burden is through defensive driving training. Drivers who have completed and passed and accredited driver’s ed class or defensive driving training are eligible for up to 10% discount according to DriversEd.com. Plus, if you’ve recently received a ticket, enrolling in a defensive driving course can prevent the premium hike on your insurance (though most companies only let you do this once every 12 months).
Defensive driving courses cover topics such as traffic laws, drug and alcohol impaired driving, and inclement weather driving and are often offered online or at commercial driving schools. Courses for defensive driving can be found through the DMV or through local community centers. In fact, defensive driving education is required in at least 15 states including Texas, Nevada, New Jersey, Virginia, Oklahoma, Oregon, New York, Iowa, Kansas, Nebraska, New Mexico, Louisiana, North Carolina, Illinois and Mississippi.
After completing a defensive driving course, participants will receive a completion certificate which can be presented to insurance companies in order to qualify for a discount. Depending on the insurance company, drivers may also have to re-take the course and be current on their certification in order to continue receiving the discount. Classes are flexible and offered on a consistent basis, however, and learning defensive driving skills is an easy way to save money and become a more comfortable driver. If you aren’t the only person covered on your auto policy, consider getting all the drivers on your policy to take a defensive driving and you can be eligible for additional discounts!
Good Student Discounts
These discounts are typically given to drivers under the age of 25 who are enrolled full-time at a high school or college/university and are maintaining at least a 3.0 grade point average or are on the honor roll or Dean’s List. In order to prove satisfactory academic achievement and receive the discount, students need a current transcript or a letter signed by a school administrator. Students that are homeschooled can present standardized test results, such as SAT or ACT scores, that within a desired percentile range depending on the insurance provider in order to qualify. Good grades can continue helping students save money even after school is out because some insurance companies extend this discount to post-grads for a limited amount of time.
Safe Driving Record Discounts
Drivers with a clean record, a standard that is determined by each individual insurance provider, are eligible for hefty discounts. Although there is no universal definition of safe driving, insurance companies generally mean avoiding collisions and accidents for which you can found at fault and avoiding moving violations such as speeding, driving under the influence, or reckless driving. Having a clean record can not only give you a discount on your insurance, it can save you a lot more money in the short term.
Resident Student Discount
Resident Student discount can be offered to students attending college more than 100 miles away from home. This discount is intended to be used exclusively by those students who are not planning to drive the insured vehicle while at school but may use it while they are home for vacations.
Other Discounts
The major types of car insurance
Though companies offer several more nuanced options and add-ons, the three major types of car insurance boil down to:
Liability coverage
Liability coverage, required by law in most states, covers the other driver’s personal injury and property damage in a crash where you’re at fault. Importantly, it does not cover your own injuries or property damage. Buying only liability insurance is always going to be your cheapest option, though not necessarily the wisest. Sometimes it makes sense to carry only liability coverage, and sometimes it doesn’t. More on this in a minute.
You’ll probably see your liability coverage written like this on your quote or car insurance policy: $50,000/$100,000/$50,000 (or 50/100/50). That means you have $50,000 in bodily injury coverage for each person, $100,000 in bodily injury coverage total, and $50,000 in coverage for property damage. Your state will require a minimum amount of liability insurance for you to stay legal.
Buying the bare minimum is tempting since it will keep your rates as low as possible. Unfortunately, that’s a bad idea — a bad crash can mean your costs will easily surpass low state minimums, and then you’ll have to pay up. If you don’t have the money, that will leave your other assets vulnerable.
Collision coverage
There is also collision coverage, which covers the damage to your own car sustained in a crash. Most commonly, this covers crashes when you’re at fault, but it may also pay in certain circumstances when another driver is at fault, or in scenarios not covered under your other policies. The cost of your collision coverage will largely depend on your car’s value, but you control the deductible — the amount you pay out of pocket before your insurance company picks up the rest of the tab.
Comprehensive coverage
True to its name, comprehensive car insurance covers almost any car-related calamity you can think of minus damage resulting from a crash. Instead, comprehensive policies pay for things like auto theft, damage from severe weather, or needed repairs after a late-night rendezvous with a disoriented deer. Comprehensive coverage is meant to complement collision coverage, not replace it. Like collision coverage, the cost will depend on your car but you control your deductible.
What type of car insurance coverage do I really need?
Comprehensive and collision coverage seem like a smart choice, but they come with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. And dropping comprehensive or collision coverage isn’t a good idea for anyone without the savings to pay for repairs out of pocket.
But there are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that you can easily fix or replace, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on any car you drive sparingly.
To see how much I would save on car insurance by nixing all coverage but liability, I plugged my own stats into a quote generator. I’m a married female in my early 30s driving a paid-off 2011 Hyundai Sonata. I live in a small southern city, have a clean driving record, and average 12,000 miles a year. A policy with 50/100/50 in liability, as well as comprehensive and collision policies with $250 deductibles, would set me back $45 a month. Dropping the comprehensive and collision policies would bring my bill down to just $24 a month.
Would I do it? No, since my car is still relatively new and would cost a significant sum to repair or replace. But let’s say I have a beat-up 2004 Nissan Altima with 150,000 miles on it. Replacing it would probably only cost about $2,000, a sum I could cover with my emergency fund if my car was totaled. Suddenly, potentially cutting my car insurance bill in half by dropping comprehensive and collision coverage makes a lot more sense.
Bottom line: Liability coverage is your cheapest option and will keep you legal on the road, but dropping collision and comprehensive coverage might be a risky move if it would be a major financial hardship to fix or replace your car.
Other types of coverage
There’s a number of other coverage types and add-ons. Of particular note is personal injury protection, which pays your own medical expenses after a crash. There’s also uninsured or underinsured motorist coverage, which means you won’t be left on the hook in a crash when an uninsured or underinsured driver is at fault in a crash with you and can’t afford to pay. Other add-ons pay for rental cars and roadside assistance.
If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies. However, uninsured and underinsured motorist coverage is a decent bet, especially in areas with a high percentage of uninsured drivers. It’s also fairly inexpensive: Adding both options to my GEICO quote boosted my monthly bill only a few dollars. As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam) rental-car riders are unnecessary, and an AAA membership is probably a better deal than roadside assistance coverage.
How to Get Cheap Car Insurance in 2015
Ditulis oleh Timothy | 8:30 AM | 2015, Best Car Insurance Companies 2015, Car Insurance, How to Get Cheap Car Insurance, tips, top 10, Top 100 Insurance Companies | 0 comments »
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