Understanding Insurance Issues

How Can You Reduce Your Auto Insurance Rates?

Most folks who are paying for auto insurance would like to find some ways to get their rates down. If you're looking to save a buck, here are 5 ways you may be able to get a better deal on car insurance.

Understand the Role of Deductibles

One of the biggest factors in setting an auto insurance premium is the deductible. This is the portion of any repair or replacement costs you'd have to pay out of pock if anything happened to your vehicle. If you have a $500 deductible and were involved in a $5,000 claim on your vehicle, for example, the insurance would cover $4,500.

A higher deductible produces lower premiums because the auto insurance company will pay out less if something happens. That doesn't necessarily mean you want a $1,000 deductible. It's wise to carry no higher of a deductible than your absolutely sure you can pay on your own.

Vehicle Safety Features

When you meet with a car insurance agent and discuss the options for your policy, they will present you with a paper that shows what the safety features of your vehicle are. Give this list a close read. If they don't include something that you're sure your car has, bring it to their attention. More safety features generally bring insurance premiums down.

Safe Driver Discounts

A good safety record as a driver should net you a lower premium. If you don't believe your car insurance rates reflect how safe of a driver you have been, bring it to the agent's attention. Ask around about different insurance carriers and what sorts of discounts they offer, too. It's also a good idea to ask about first-accident forgiveness plans.

Drive Something Less Flashy

If you're currently driving a high-end car, you might want to consider moving down to something with less of a wow factor. First, insurers have to account for the replacement cost of a car, and that can be a lot for a nicer ride. Second, most car insurance providers also discriminate against vehicles associated with riskier behavior, such as bright red sports cars. Finally, the documented history of your specific make and model of car counts against your ride.

Pay on Time

One of the simplest tricks is to make sure every payment arrives on time. Many insurers offer discounts to folks who opt-in for automatic payments so take advantage of that if you can. Similarly, a lot of companies apply penalties or even premium hikes if drivers are late with their payments.