Tips to Lower Your Car Insurance

Car insurance is one of those things that we, as drivers, absolutely must have.  Although you may have been with a company for many years, don't take it for granted that your insurer is giving you the best deal you can find. 

Financial Considerations:  Rate Shopping, Deductibles and Payments

Every company has different guidelines about risk, and what might be considered a risk by one company may not be a risk to another.  The first thing to do if you want to lower your car insurance premium is to shop around for better rates. You might be surprised to find some excellent rates on the Internet that might be significantly lower than the rate given to you by a local agent.

Pay attention to the deductibles because your deductibles will drastically affect your car insurance rate.   You might want to consider choosing a low deductible for  your comprehensive insurance because someone might run into your car in a parking lot, leaving you on the hook for the bill. When deciding how high to go on your collision insurance, consider the value of the car and what deductible limits might be set by your lender if the car is not paid off.  Subject to lender limitations, you might want to set the collision deductible high -- such as $1,000 or so -- because chances are, if someone hits you, your insurance company will sue to collect the damages.  If your vehicle is worth less than $3,000, you might want to drop the collision altogether because the money you save over a couple of years could replace the vehicle.

Blurb Alert!

Don’t exaggerate the value of your car. The more expensive you say your vehicle is, the higher the insurance rate will be. Just give the amount needed to replace it and update this figure annually.

Pay your insurance premiums annually instead of monthly -- or even semi-annually or quarterly if you can.   This will save you quite a bit in the long run since the companies charge substantial interest rates for carrying the balance.

Practical Considerations for Lowering Your Car Insurance

Sports cars and four-wheel drive vehicles are risk classifications that will result in a much higher rate, particularly if you are under 25 years of age.

Install an anti-theft device if your vehicle doesn’t have one. The cost for installing a system can be as little as $100 and insurance companies give large discounts for anti-theft devices.

Keep a clean driving record, and don’t make frivolous claims! You might be surprised how many people make claims for petty things. If you have an issue that will cost you less than $300 or $400, pay it out of pocket. Many companies will reward you for staying claim free.

"Tips to Lower Your Car Insurance" contributed by Edward Porter