When you talk of ways to save money on car insurance, the first thing that comes to mind is how can you save money on car insurance. Remember that insurance premiums vary from hundreds to thousands and it also depends on your car insurer and the type of car you drive. But firstly we look at what’s an insurance premium?
What’s an insurance premium?
An insurance premium is the cost of obtaining an insurance cover, paid for a contract of insurance, operating expense. This is either paid in full or by installments (monthly) for the period of the policy.
Insurance companies are strict on insurance premiums and a failure to pay when its due will automatically cancel the insurance policy. Once paid the policy will be restored but most times it comes with a penalty. The insurer may decide to receive any further installments rather a full payment.
When you take a monthly installment policy with an insurance company, you are taking a loan from a financing company who pays the full premium to the insurer, and the installment you pay goes back to the financing company. This is why it is always cheaper to pay a full insurance premium because paying by installments comes with interest.
How can you save money on car insurance?
Here is how you can save money on car insurance
Do some insurance shopping
When shopping around for insurance quotes, remember that insurance quotes differ from one from insurance company to another. Using insurance comparison websites is a good way to finding a better deal. Bring together at least four insurance price quotes and compare their services, pick the best three and contact the insurance companies with the best quotes for more information’s.
Reading other customers reviews is important, they are the people with firsthand experience with the insurer. Get information from friends and relatives, they can share their experiences with their insurance so at least you gather more info.
Best car insurance rates
Before buying the car, check for the best car insurance rates on the car, because the more expensive the car the higher the car insurance cost. How the car insurance premiums are calculated depends on the price of car, the cost of repairing the car, the safety record of the car and theft possibility of the car.
You can get insurance premium discount from most insurers on car with low risk of theft, low risk of repairs and many more. Checking for the car safety ranking is a good idea if you are looking for the best car insurance rates.
Car insurance deductible
A car insurance deductible is the amount of money you pay for damages from a car accident before the insurance company pays the remaining. If you choose a higher car insurance deductible, you lower the cost you pay in a claim.
How car insurance deductibles work
How car insurance deductibles work is, if you get in a car accident that is your fault, this is means you are responsible for any damages. This is how it is calculated: If your insurance deductible is 1000, and the estimated repairs cost on your car is 2500, you will pay 1000 while your insurance company pays the remaining 1500. If you get into an accident and the damage cost is 950 and your insurance deductible is 1000, you will pay all 950 because the repair cost is less than you insurance deductible.
Before choosing higher car insurance deductible, make sure you have that money set aside, even though choosing a higher deductible reduces you insurance premium.
Older car coverage
When purchasing a new car, check to see where your insurance company can make some adjustments. If the cost of the new car is less than the insurance premium, consider discussing this with your insurer as this can save you money.
Also check online for the worth of the car before purchasing the coverage as something the amount you bought a car can be higher than the car worth. Also consider dropping the comprehensive coverage as this also drive the cost of premium high.
Home and car insurance bundle
Home and car insurance bundle works when your home insurer also provides car insurance. Taking up a bundle insurance policy can earn you some discount. Also if you have other cars, you can take a multi car insurance with same insurance company. Don’t just take our word for it, search around as you may find cheaper car insurance with different company buy insuring cars separately.
Have a good credit history
Having a good credit history can lower insurance costs as most insurance company use your credit history/record when presenting you with a quote. Good credit history means lower premiums.
What’s a good credit score?
A good credit score depends on the scoring system that the lender uses, and different lenders uses different scores. For a credit score of 700 or is considered a good score, and a score of 800 or above is considered excellent. Even though most credit score fall between 600 – 750.
Low mileage discount
Low mileage discount apply to driver who drive on low mileage per year. If you don’t intend to go to work or travel about on your car a lot, the premium may reduce if you let your insurer know what mileage you will cover annually.