Due in part to the state of today’s economy, it is more important than ever to
save money whenever and wherever you can. This includes the purchase of auto
insurance, a costly expense all drivers must face.
(A recent study by the Insurance Information Institute indicates that the
average consumer pays almost $900 dollars a year, for basic coverage. This
figure can be much higher, dependant on factors such as age, driving record,
etc.)
The good news is this… there are several ways to save money on these premiums.
One of the most important things to remember is that insurance companies are a
competitive bunch, all vying for new business. The key to saving the most money
is to SHOP AROUND, before making a final decision.
If you are in search of a more affordable policy, the following tips will go a
long way in helping you locate one. In this case, it really pays to be an
informed consumer.
Tip number one. If you have a good driving record, consider purchasing your auto
insurance through a direct agent, as this will usually save you the most money.
When you utilize the services of an exclusive or independent agent, you are
paying them a commission on top of the actual coverage price.
Direct agents are typically those who use their own employees to sell insurance
to consumers, either by phone or online. There is never a middleman involved.
One of the best examples of this type of agency uses a Gecko as their
‘spokesperson’.
Even though your aim is to save money, make sure you stay away from sub-standard companies that might seem to be offering the biggest discount.
Tip number two. Ask for discounts. As a rule, agents don’t readily share this information unless they are asked. Industry wide, there are several types of discounts available. Exactly what is offered is dependent on each individual agency.
Typical discount categories include, retirement discounts, good grade discounts,
defensive driver discounts, association affiliation discounts, safety feature
discounts and loyalty discounts.
Tip number three. Another good way to save money on your auto insurance is to
increase your deductible. Yes you will pay more, out of pocket, in the event of
an accident or other incident… but your overall premiums will be less.
There are two deductibles to consider, comprehensive and collision. Comprehensive coverage protects a vehicle in the event of theft, vandalism or natural disaster.
As you might guess, collision covers vehicle repairs or replacement cost, when
involved in an accident.
On average, increasing a deductible from $200 to $500 can result in a savings of
up to 30%. Better yet, increasing it to $1000 can save you as much as 40%.
Bonus tip. Improve your credit score, if necessary. Unfortunately, your lack of
good credit can cost you, when it comes to purchasing auto insurance. Those with
bad credit sometimes find that they are paying in excess of 30% more for the
same coverage as someone who has a good credit score.
