Car insurance is mandatory and also very expensive. Especially young people pay a lot for their policies, but let’s face it: car insurance is costly for every driver. Are there any ways to lower its cost and save some money? Learn more about auto insurance policy and check out how to lower its price.
What Is Car Insurance?
In most countries and most states in the USA car insurance is mandatory. It provides us with financial protection in case of an accident. Insurance protects us against financial losses caused by an accident or a theft, depending on a coverage of our policy.
Insurance coverage is priced individually. Basic, legally mandated insurance, is the cheapest – we have to bear the cost of every addition we find useful. What’s important, that the basic policy does not cover damages to our car – only damages our car causes to others. To protect our car as well, we have to buy additional coverage. We can pick among a couple of options:
- collision coverage, which protects us in case of damage in result of a collision,
- comprehensive coverage, which protects us in case of damages in a result of theft, flood, vandalism, falling trees, and many other hazards.
Extended coverage will be more expensive, but it’s the excess that’s worth paying. However, we always should seek a cheaper option by comparing various quotes on the internet.
What Affects the Price?
There are many factors that affect the price of an auto insurance policy. A driver and a car are the most important ones. The insurance company, while calculating a quote for us, pays attention not only to our driving history but also our age, gender, marital status and a place we live in. In case of a car, companies also look at its age, size, and of course type of an engine.
These are some basic factors which affect the price of a policy:
- marital status – married people tend to have fewer accidents than single people. Getting married will lower your insurance rate – especially if you are a man.
- engine – cars with larger engines have higher insurance rates. It applies for example to sport cars with big V8 engines.
- credit score – did you know, that low credit score can affect your insurance rates badly? Check your rating and keep it high.
How To Save Money On Car Insurance?
There are a few easy and clever ways to save some money on auto insurance and lower your rates. Try to implement some of them and you will save money easily.
Compare many quotes before choosing the best one
Quotes for an identical policy can be really different – they vary in hundreds of dollars. It is crucial to compare prices from multiple insurance companies. An insurance company, that is the cheapest for one person, can be very expensive for other – it all depends on the driver, his discounts, and his car.
Benefit from various discounts
Insurance companies offer many types of interesting and profitable discounts:
- safe driving – clean driving records and no accidents on your account can ensure you with cheaper policy,
- combined insurance – you can lower the price by combining car insurance with other policies, f. ex. home insurance,
- multiple cars – you can save by adding multiple cars within one policy,
- organizations – many insurance companies provide special discounts for members of professional organizations or affiliate groups,
- students – students who have good grades can count on some bonuses,
- new drivers – if you are a fresh driver and you have decided to take a special training course, you will be granted a discount,
- refresher course – older drivers will also get a discount if they have taken a special refresher course,
- safety features – if you put in your car anti-theft equipment and some safety features, your policy will be cheaper.
Pay attention to your credit score
A bad credit score can boost your insurance rates by hundreds of dollars. That is why it is so important to keep your credit rating high. Try to improve your credit score to get better quotes from insurance companies. Pay your bills on time, pay off all your debt, and watch your credit card balances.
Consider buying multiple-policy
You will be also offered a discount if you buy homeowners insurance, renters insurance or life insurance policy. Buying multiple policies in one insurance company will is viable.
Consider buying pay-per-mile insurance
If you don’t drive much you can pay for your insurance by the mile. It is cost-effective when you drive less than 10 000 miles a year. Thanks to reduced driving you can save not only on insurance’s price but also on gas (because you will surely try to drive less to lower the cost of the insurance). A pay-per-mile insurance can cut 5-10 percent of your policy’s cost.
Basic car insurance is mandatory, but even in its simplest option, it can be really expensive. If you want to expand your policy and protect also your own car from the cost of accident, theft or other hazards, the price can be really high. Fortunately, there are many ways to lower car insurance cost. Consider using some discounts and always pay attention to your credit score – low credit score affects your policy’s cost badly. Do not forget to compare multiple quotes from various insurance companies before choosing the best and the cheapest one for you!
Author: Olga Gierszal
AT TIMETO YOU HAVE MANY WAYS TO MAKE MONEY
WITH YOUR BANK ACCOUNT
CHEAPEST LOAN