Have you ever wondered how you can reduce your car insurance costs? With this guide, you will find useful information that can help you understand if you are eligible to receive car insurance discounts.
Insurance companies make money through monthly insurance premiums that its customers pay, and incur expenses when it has to pay out claims after an accident. It bases the cost of your car insurance policy around the amount of risk the insurance company feels it is taking on to cover your driving.
So, the riskier your driving habits are (among other reasons), the more you are likely going to pay to be insured because the insurance company is taking on your risk. Do not worry as there are many factors that can help you save a buck. To find out, keep reading!
Lower Insurance Administrative Costs
There are common ways to lower car insurance costs that relate to lowering administrative activities associated with holding your policy. This includes getting involved in automatic payments, bundling insurance plans, and paying out six months to a year’s worth of coverage up front at one time. There are many others mentioned below.
Related to lowering your administrative costs mentioned above,the first markdown is the multi-car discount. This states that having more than one car bundled together into one policy will qualify you for a better monthly rate.
Speaking of bundling, you can also bundle your home and car insurance policies together. If you own a home or condo, the combined effort will lower total costs up to 20% in most cases. This can also be applied to bundling your life insurance plan. When you combine your insurance plans, the insurance company makes more money with less operating expenses (administrative), incentivizing it to offer a price cut to attract and retain a loyal customer base.
Be sure to know when your policy is ending. If you are on-top of it, you can lower administrative costs by helping the insurance company with the paperwork involved in the policy renewal. You may get a discount up to 8% in some situations by being proactive with letting your insurer know your policy is about to end.
Vehicle Types and Safety Features
Some vehicles are safer than others. Insurance companies take the type of car you have into consideration when deciding your premium monthly cost. There are statistics that newer cars tend to be involved in less accidents. Drivers with safety features added to the car has also seen a drop in accidents, lowering the insurance risks.
Insurance companies incentivize people to look into these features because in the long run, it saves the company money from having to pay out the claims that follow the accident. Having telematics installed into your car is one of those factors that will lower insurance costs.
According to car insurance comparison company, QuoteWizard, “Insurers like Progressive and Allstate will give you a discount if you connect a telematics device to your vehicle’s on-board computer. Cars made after 1996 have integrated computer systems that monitor aspects like acceleration, speed, braking, and turning. Safe drivers can prove their daily good behavior with data that’s transmitted to the device.” Look into the many telematics features that you can install in your car to save you money.
Below are some extra money saving factors that insurance companies provide to those who own certain types of cars and/or extra safety features installed.
Insurance companies give cost reductions to new cars which usually carry all the features described below. One of the best car insurance cut-rates is the alternative fuel discount. If you own a hybrid, electric, ethanol, or flex-fuel car it will likely lower your monthly car insurance bill.
If your vehicle has an electronic stability control (ESC), you are eligible for a discount. This car feature averts power from your wheels with condensed tractions. It helps mitigate rollovers or sliding in risky circumstances. Also, if you have anti-lock brakes, you will receive a cost reduction.
According to Insurance Information Institute, a motor vehicle is stolen on average every 45 seconds in the United States. For those who own a vehicle with anti-theft, the chances of it getting stolen reduce dramatically. This helps to make your insurer comfortable knowing that it will not have to pay the costs to replace the stolen vehicle, thus lowering your costs.
Driving and Insurance History Matters
A driver who has a clean record is going to receive a lower monthly bill than someone who has been in multiple accidents, received multiple tickets, or has failed to pay monthly insurance bills. For those who have been accident, ticket, and incident free, expect to receive a discount. Insurance companies will love you for this.
For those who have been continuously insured for an extended period of time, insurance companies will feel safer knowing that you are responsible because you were covered. Any time lapse of not being insured will signal yellow flags to insurers. Loyalty does have a positive effect in the sense that some companies will reward you by sticking with them for an extended period of time.
One of the least known insurance cost decreases people can receive is the defensive driving discount. Not only will you become a better driver, your insurance company will appreciate your effort with the reward of lowering your costs. Many states require insurance companies to offer a deduction for those who take these extra courses. You can check out if your state offers the defensive driving discount here.
Membership, Career, and Student Discounts
For students who have good grades (B average), you are eligible to receive a monthly cost subtraction. Some insurance companies will reward the top 20% students of every high school and college student. Once you graduate from college, you can receive an additional discount. Additionally, if you are a student who lives more than 100 miles away from home,you may be rewarded for your relatively distant location.
Are you a part of any memberships? If so, look to see if your insurance company offers a car insurance discount. Being involved in AAA, MENSA, and a few fraternities and sororities can make you eligible. Also, if you are a part of an affinity group such as a doctor, lawyer, teacher, engineer, and other similar professional, there may be a discount waiting for you to snap up!
Special Car Insurance Discounts
Low mileage drivers will enjoy seeing a discount for not driving far and/or often. If you drive less than 10,000 miles per year you are eligible for this price modification. If you commute to work, 22% of car insurance companies will offer you a discount if your drive is fewer than 15 miles. Those who work at home will save even more money.The correlation of driving less is usually associated to be less accident prone.
Being married has its benefits in the sense that insurance companies consider this demographic to be more responsible. Many will see this a worthy perk to save a few dollars every month.
If any of these factors apply to you, do not be afraid to reach out to your insurance company and ask for a cost cut. Your insurance rate is negotiable, do not feel as if you are stuck paying monthly costs that you think are unfair. Simply reaching out shows your insurance company that you are on top of your policy, and will reward your active engagement with your car insurance company with a nice car insurance rollback.