10 ways to reduce your auto insurance

 10 ways to reduce your auto insurance

 10 ways to reduce your auto insurance

And the insurance rates you pay largely depend on the insurance company or agent, your age, your type of car, your driving record, and even the area in which you reside!

However, you should never be without car insurance, despite the costs. Almost all states require that you protect yourself with a minimum amount of liability coverage.

Naturally, the bare minimum is not adequate enough for the average car owner. And as you add additional coverage for your car, you realize you'll be paying a pretty hefty sum each year.

So understanding auto insurance can help you decide on a suitable insurance policy that won't clean out your wallet. Here, we've rounded up 10 of the best tips to reduce your auto insurance, by up to 40%!

Always compare insurance policies. There are states that regulate auto insurance rates, but insurance premiums can vary by hundreds of dollars for the exact same coverage.

Definitely worth a look around. The first thing you can do is check with your state insurance department. They often provide information on the coverage you need, as well as sample rates from the larger companies. You can also ask your friends or look in the yellow pages.

Consulting consumer guides and asking insurance agents can also pay off. You can easily find out the price range of your insurance policy, as well as discover the lowest prices in town.

However, you should not buy based on price. The insurance company must provide a good service at the best price. Great personal service is also available, and they provide extra amenities, though they cost a bit more.

Ask the company how you can reduce your costs, and also check their financial qualifications.

The general rule of thumb is to always get three price quotes from three different companies and choose the one with the best value.

It may also be a good idea to increase your deductibles. When you file a claim, the deductible is the amount you pay before the insurance company pays the rest of the damage.

A higher collision deductible and comprehensive coverage can result in a much lower premium.

For example, increasing your deductible from $200 to $400 can reduce your premiums by up to 25%.

However, you need to make sure you have the financial resources to handle the larger deductible when the time comes.

Eliminate certain types of coverage from your policy. Almost all states require liability coverage for your car, but all other coverage is probably expendable.

However, you don't want to be underinsured if you're in an accident, so it's not a good idea to drop all of your extra coverage.

Optional coverage includes medical payments, uninsured motorist, collision, and comprehensive coverage.

Allow collision and comprehensive coverage for older cars. If you drive an older car that's worth less than $2,000, it's probably more cost-effective to drop collision and comprehensive coverage, since you'll likely pay more for coverage than you'll charge for a claim. You can find out the value of your car by asking car dealers and banks.

Make sure your credit report looks good. Auto insurance companies often look at your credit history, as there is a correlation between the risk to the company and your credit history.

If you pay your bills on time and maintain good credit, you can enjoy lower insurance rates.

Drive less. Insurance companies often offer low mileage discounts to motorists who drive fewer than a predetermined number of miles each year.

You can use public transportation more often, carpool with friends, and take the train or plane instead of driving to another state.

And you'll save more than just your coverage because you'll need to spend less on gas (which is incredibly expensive).

Maintain a clean driving record. The company will give you a discount on the price and you will be able to save on your insurance policy after a specified period of a clean driving record.

This means that you have no accidents, no serious traffic violations, etc., during this period of time. The easiest and surest way to qualify for this discount is to drive carefully and defensively at all times.

Choose a low profile car. Insurance rates vary between different vehicle models. Generally, sports cars and performance cars tend to cost more to insure, mainly because they pose a higher risk of theft and the drivers tend to be the most reckless drivers.

Newer cars will cost more to repair or replace than older ones, so naturally they can insure more. Low-risk vehicles include pickup trucks and sedans.

Ask about safety and security discounts. Insurance companies sometimes offer discounts on your insurance if your car is equipped with the following:

anti-lock brakes, air bags, automatic seat belts, car alarms, tracking systems. These reduce the risk of injury to you, as well as the chances of your car being vandalized or stolen.

Finally, ask about other discounts. You may receive a discount if you buy more than one type of insurance from the same company or if you insure multiple cars under the same policy or company.

You can also receive discounts for taking a defensive driving course, staying with the same company for a few years, being a driver over 50, good student discounts, and being a AAA member.

If you already have adequate health insurance, you can also eliminate paying for double medical coverage, thereby reducing your personal injury protection costs by a substantial amount.