Top 7 Ways to Save When Buying Auto Insurance
Auto insurance is expensive. And if you are a driver, there is no legal way of getting around it. According to a 2011 insure.com study, the average American driver spends more than $1,500 per year on auto insurance. And in Michigan, the average driver spends more than $2,200 per year on insurance.
To help you cut your expenses, we provide our top 7 ways to save when buying auto insurance :
#1. Keep a Clean Driving Record
Nothing raises insurance rates faster than at-fault accidents. Insurances rates may rise hundreds of dollars after a collision, especially if you have other at-fault accidents or traffic violations such as speeding. The best practice in staying out of accidents is to be a responsible driver and keep your speed down. Speeding is a leading cause of serious injuries and fatality accidents. Also, drive defensively. Keep plenty of space between your vehicle and those in front of you. If weather conditions are adverse, adjust your speed accordingly. You can read this article if you need more tips and tricks on how to drive safely, which should help you to avoid an accident.
#2. Drive an Older Car
Vehicle repair can be costly. Property damage claims and total loss accidents cost auto insurance companies billions of dollars a year. While prices vary by model and by company, the more expensive a car costs, the more expensive are the repairs and total loss value.
If a car has less value, then a driver is likely to pay lower insurance rates to drive it. While this may be true, it is still wise to driver a car that has more modern safety features such as side airbags and electronic stability control.
#3. Shop Around
Just because you get your insurance policy renewal form doesn’t mean you should just pay it. There are dozens of companies selling insurance in your state. Whether it is online, by phone, or in-person, take the time to shop around and compare prices. While you should factor in other considerations besides price, a few minutes of your time could save hundreds of dollars on your new policy term.
#4. Look for Companies that Target Safe Drivers
Insurance is about risk. The more likely you are to file a claim, the bigger risk you present to an insurance company. As a result, drivers that have a past history of traffic violations and collisions pose a larger risk for insurers and correspondingly pay more for coverage. A driver’s age, marital status, and credit score may also be factors.
Look for companies that target drivers with excellent driving records. For example, in Washington and Oregon, Pemco is a company known for low rates but their insureds need to maintain a safe driving record or their coverage may be dropped. Since the cost of claims is shared among the pool of insureds, companies typically must keep their risk low to offer low rates. Larger insurers may do business under a variety of different names to target different categories of drivers and spread out risk.
#5. Check for Individual Discounts
With all the companies offering “discounts” in can be hard to cut through the pricing to know who is actually providing a low price for auto insurance. Nevertheless, it never hurts to make sure to check with companies and make you are getting credit for all qualifying discounts, which may include good driver, good student, multi-policy, multi-vehicle, military, anti-theft devices, safety devices, and vehicle tracking systems.
#6. Check for Group Discounts
In addition to individual/family discounts, if you are a member of an association, union, or club you may qualify for group discounts. Also, if you are a member, consider the Costco auto insurance program, which is offered through Ameriprise Auto & Home.
#7. Don’t Pay Attention to Insurance Ads
Insurance companies spend billions of dollars a year on advertising with each seemingly offering savings of hundreds of dollars, discounts, money back, accident forgiveness, and ticket forgiveness. Even if you see a discount that appeals to you or fits your situation, it is still best practice to shop around and compare rates.
Following these top 7 ways to save when buying auto insurance could make a big difference in the rate you pay. But remember, customer service, claims service, and financial stability should also all be important factors when insurance shopping.
