Auto insurance is a good financial decision and a way to protect yourself on the road. Unfortunately, the rising costs of auto insurance can take a toll on your pocket. Several factors determine how much you’ll pay, from things you can control like your driving habits and history to other uncontrollable circumstances. But it is always advisable to always keep an eye out for the best deals.
Here are a few effective ways to cut your auto insurance costs.
Look for higher deductibles
Deductibles are the amounts you must pay out of your pocket before your insurance coverage kicks in. According to some reports, asking for larger deductibles significantly reduces your costs in your insurance premium. For instance, you can save between 15% and 30% on a comprehensive policy when increasing your deductibles from $200 to $500.
And increasing your deductibles to $1000 can save you at least 40%. But before going for a larger deductible, ensure to set aside enough cash to cover it if you ever need to file a claim. You may also want to talk to your agent before making any decision.
Consider downsizing your car
Insuring a higher-end vehicle can cost you more than insuring a small yet safe lower-end vehicle for your commuting. Some insurers offer discounts up to 5% for hybrid or alternative fuel vehicles. Downsizing your car doesn’t only save you money on insurance but helps you feel good about helping the environment. Therefore, consider running some hypotheticals with your insurer before purchasing a new vehicle.
Review your coverage
It can be risky to drop some forms of coverage since you can’t say whether an accident will happen. Despite this, it is practical to forgo some insurance packages if they won’t be worth it. For example, comprehensive or collision coverage won’t be a good idea if you own an old vehicle.
While cost, driving history, and other factors are important, it is reasonable to review the coverage on your old car since insurance companies will likely declare the vehicle totaled. At this point, it is pointless to purchase comprehensive coverage when the car is worth, let’s say, $2000 and insurance costs are $1000 per year.
Install some safety gadgets
You can decrease your annual insurance premiums by installing some safety devices on your car. For example, some insurers offer up to a 25% discount for vehicles with an anti-theft device installed. Your insurer should be able to inform you about which devices can help you save money on your premiums.
If lowering your insurance premium is your primary motive for installing a safety device, figure out if the cost of adding the device will result in substantial savings to justify the price and trouble. Other helpful gadgets such as these Motorola police car radios and in-car video cameras can assist in proving fault in accidents, serving as a second set of eyes on the road. This is a wonderful way to avoid an increase in your insurance premiums.
While auto insurance rates are likely to continue rising in the future, there are a few things you can do to keep your costs at the barest minimum. The tips mentioned above should keep you on the right route to enjoy the best experience on the road without worrying too much about finances.
