Whether you are buying a new car or looking for ways to lower the premiums on the old reliable family car, research your options before signing on the dotted line. Here are some suggestions to consider before making your decision.
1.Look for Discounts
Auto Insurance companies offer discounts that will lower your premiums. Some companies offer discounts for anti-theft and safety equipment so keep this in mind when you purchase a vehicle. Discounts may be available for affinity groups you might belong to, such as college alumni, professional groups, AARP, military organizations, and educational organizations. Affinity group discounts are not available in all states because of certain state insurance regulations.
Discounts may also include coverage for students with good grades and for older drivers who take refresher courses or other driving training courses. If you are driving less because of a lifestyle change such as retirement or job location, tell your insurer. In some cases, you could lower your premiums by 5 to 10 percent. Low mileage varies with companies, but it usually falls between 7,500 and 15,000 miles per year.
2.Drop Unused Coverage
If you have a car loan or are leasing a vehicle, the lien holder will require comprehensive and collision coverage. If your car is older or has a low market value, consider dropping collision and comprehensive coverage. They are not legally required in any state, and the maximum payout will only be the value of your car of is stolen or totaled. Consider dropping them if your annual costs are more than 10 percent of the current value of your car.
One of the benefits of comprehensive coverage is that the insurer pays for the value of your car if it is stolen and not recovered. It also covers damage not caused by collision, including damage from weather, floods, fire, and falling objects. If your neighborhood has a high incidence of vandalism, theft, or severe weather and paying the repairs would cause a hardship for you then you might want to compare the premium cost to the possible cost of repair.
Collision insurance covers damage to your car if someone else hits you or you hit an object such as a fence or a tree. Keep in mind that if you drop either coverage, it would be wise to have enough money set aside to pay for repairs or to put towards another vehicle if needed.
3.Combine your Policies
Since your auto insurance is the biggest risk for insurance carriers, consider combining it with your other policies. If you have homeowners or renters’ insurance, you might save money by combining policies and getting a multiline policy. You are more likely to have an auto accident than a hail storm hitting your house so by combining policies with a single company you lower their risk when you bundle them together.