7 Clever Strategies To Lower Your Car Insurance Rates

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by: margachan73
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Date: Sun, 13 Feb 2011 Time: 11:15 PM
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The cost of car insurance is already high. If you're like most; when you insure a car you ultimately pay more than you really need to. The explanation? There are plenty, but most can be grouped under a lack of awareness regarding innovative ways to trim their rates.

The further you can lower your rates, the more money you'll have to spend on other priorities. That can include investing in home renovations, reducing your credit card debt, or funding your retirement. The key is planning ahead, and taking an active approach toward shaping your auto insurance policy to meet your needs and budget. Below, we'll share seven methods for reducing your premiums. Each can be applied in nearly every circumstance.

#1 - Adjust Your Deductible

Your deductible is the amount you're required to pay before your insurer pays for any submitted claim. For example, if your vehicle sustains $2,000 in damage, and your deductible is $500, you'll need to pay $500 before your insurance company pays the remaining $1,500.

The higher your deductibles, the lower your rates. Consider raising them. As long as you have the funds to cover the amount you'll need to pay upfront, the risk is minimal. Meanwhile, you'll save a significant amount of money over the long run in reduced premiums.

#2 - Maintain A Blemish-Free Driving Record

You already know your driving history plays a key role in determining your auto insurance rates. If your record shows multiple at-fault collisions and traffic violations, be prepared to pay more for coverage. If, on the other hand, your record is clean, your insurance premiums will be lower.

Take steps to clean your driving history, and maintain a flawless record. If you currently have a few black marks, realize they will eventually drop off. Be patient and drive safely.

#3 - Remove Collision and Comprehensive Coverages

If your vehicle is new, collision and comprehensive coverages are a good idea. The former covers damage stemming from an accident. The latter covers damage resulting from events unrelated to accidents (e.g. falling trees, vandalism, etc.). Both coverages are valuable, but expensive.

When the market value of your vehicle is high, it makes good fiscal sense to pay for collision and comprehensive. When your car's value falls, it's time to reconsider. Many consumers carry both coverages much longer than they should. Dropping them will lower your rates.

#4 - Bundle Multiple Insurance Products

Insurance companies want as much of your business as possible. If you currently have your property and car insurance policies written by different insurers, it pays to bring them under a single roof. Most companies will extend a discount to policyholders who agree to bundle their coverages. Unless you have a compelling reason to do otherwise, it's a good, quick strategy for reducing your premiums.

#5 - Take Advantage Of Discounts

Nearly every auto insurer offers discounts (though some are more generous than others). By meeting specific criteria, you may qualify for a reduction in your rates. For example, students who maintain high grades may be eligible for a discount. So, too, might retirees. If you have completed driver education courses, installed an alarm system in your car, or belong to a professional association, ask your insurer whether you qualify.

Many people are eligible for discounts, yet fail to take advantage of them. It is another fast and painless way to lower your auto insurance premiums.

#6 - Don't Drive A Wanted Vehicle

Some vehicles are stolen more often than others, and thus are more costly to insure. Auto thieves target certain makes and models for a number of reasons, including ease of access, resale value, and the market value of certain parts under the hood. Knowing whether your car is on the "most wanted" list may be the impetus you need to trade it in for another vehicle.

Each year, the Insurance Bureau of Canada (IBC) releases a list of the top stolen vehicles. Check the list, and note whether your car is on it.

#7 - Compare Quotes On A Regular Basis

Lastly, we come to one of the most effective ways to reduce your premiums over the long run: comparison shopping. Most people assume their rates are as low as possible, or will be the same regardless of the insurer. But few investigate whether this is truly the case. Auto insurance premiums vary dramatically from one company to the next. If you neglect to compare quotes across multiple insurers, there is little chance you'll find the lowest rates.

Whenever your current policy is about to renew, spend a few minutes to request quotes from other providers. You can do so online. You may discover lower premiums - and big savings - for the same coverages elsewhere.

About the Author

Another obvious way to save is to avoid accidents. Collisions definitely affect your car insurance rates. The loss of demerit points will also cost you, so keep your record in good standing.