(This is a guest article*)
With auto insurance being mandatory for all drivers, simply canceling coverage is out of the question. But paying for premiums that could be lower when you’re just starting to make some dough isn’t smart either, especially since student loans and other expenses loom. Auto insurance premiums can be especially daunting if your parents were taking care of them while you were in school. Fortunately, there is hope for the struggling grad and you may be able to hold on to more of your hard-earned cash.
- Do smart comparison shopping
- Look for multi-policy, and other discounts
- Limit coverage on older cars
- Raise your deductible
- Maintain a clean driving record
Before you decide to stick with your current insurer, do some comparison shopping with at least three other companies. Considering how easy it is to get quotes and access policies on the internet, you can’t really afford not to spend some extra time and effort. In your search, not only does price matter but quality of service is important also, since there is no use in paying premiums every month to a company who won’t provide you with decent service. Check to make sure that the company is financially stable, so that when you need them the most, you’ll know they have the resources and financial power to do so. Check the financial health of companies with Standard and Poors and other consumer organizations. Also check with your state department of insurance and other consumer sites for complaints about insurers in your state. Ask trusted family members and friends who they have policies with and what their experiences have been like. Another resource is your friendly mechanic, who deals with insurance companies all the time, and can give you some insight on which companies handle claims the best.
Some companies will offer account holders a discount if they have more than one policy with them. If you have renters insurance with the same company, it doesn’t hurt to ask if they offer a discount if you have auto and renter’s insurance with them. There are a multitude of other discounts that may apply to you also. Some of them may apply if you have been a long-time customer, or have had no accidents or violations in three years. If you don’t do a lot of driving, you may be eligible for low annual mileage discount. It doesn’t hurt to ask about these discounts you may not know about.
If your lugging a car that is very old or isn’t worth much, you may not even need collision or comprehensive coverage and assume the losses yourself. Collision coverage takes care of damages of your vehicle in a collision and comprehensive coverage covers damages from events not related to collision such as natural disasters, theft, and other events that you couldn’t be responsible for. Know the replacement value of your car by checking with dealers or with Kelley Blue Book and if paying premiums for the value of your isn’t worth it, then consider axing the coverage all together and just paying for the mandatory liability insurance. Be sure to have enough money set aside in case of an accident, theft or other damages.
Doubling your deductible can lower your premiums significantly. For instance, raising a $500 deductible to a $1000 one may be able to save you 20 to 40 percent. It means more out of pocket money for you in case of an accident, so be sure to have the deductible amount in a savings account and don’t touch the money otherwise.
Avoiding reckless driving is the foundation to keeping your premiums low. Keep that in mind when you find yourself distracted on the road, and fix your behavior immediately.
Plus if you are driving safe and are attentive on the road, you more likely to stay out of accidents and avoid paying those deductibles in the first place. Taking defensive driving classes may also qualify you for discounts so check with your insurer to see which classes apply. Also, consider safety first if you will be purchasing a new car, since cars with certain safety features such as anti-lock brakes, airbags, and anti-theft devices get lower rates.
*About the author: This article was written by NetQuote. NetQuote provides low-cost leads from most of the major insurance providers in the auto insurance industry.
*Image Credit: Photograph by net_efekt [via Flickr Creative Commons]