Every time you take your car on the roads, there is a risk of your car getting hit, or you hit some other vehicle. There are over 6 million accidents in the US (according to a study in 2019), and this number is rising. These higher risks make getting car insurance necessary. But auto insurance is expensive, and so are those insurance premiums.
Is there no way to get excellent vehicle insurance and not pay sky-high premium prices? There are ways to get to that perfect auto insurance. Here are some practices and tips to negotiate a lower car insurance premium. Each tip might only get the price down a little bit, but combining them can save you a lot of money.
Compare Insurance Companies
The very first step to getting a lower car insurance premium is to choose the perfect car insurance company for you. Make sure you get affordable insurance coverage from a good company that not only offers insurance at a cheaper price, but provides great coverage, lower premium prices, and excellent customer service.
Don’t just go for cheaper insurance companies that do not offer good services. Read reviews, and ratings, compare coverage and talk to their agents to clear all the doubts. This is the first step in getting lower insurance premium prices.
Increase the Deductibles
For those who don’t know, the deductible is the amount that you have to pay before the insurance company pays the rest of the coverage amount. So let’s say that you have decided to keep the deductible to be $1,000. In case there is an accident, and the cost of repairs is $5,000, you’ll have to pay $1,000 and the insurance company will pay the rest of $4,000.
The general rule is, that if you keep the deductible amount less, you end up paying more for the premium. So to reduce the insurance premium price, you must increase the deductible amount. But this could be a double-edged sword. In an accident, you might end up paying more for the damage.
Get No Claim Bonus
Insurance companies reward drivers who drive safely and do not make any claims for the entire policy period. So at the end of the policy period, you can get great discounts for no claims, creatively called “No Claim Bonus”. Usually, most insurance companies increase the discount bonus each year with no claim. So for the first year, you might get 10% off, and if you maintain the streak for three years, you can get almost 50% off!
Avoid Insurance for Older Cars
Want to save money on insurance premiums? Let the old cars sit without any collision or comprehensive insurance. If your car is more than ten years old, then paying a hefty premium makes no sense when the total amount of the car is less than the insurance you have for it. Skip the collision and comprehensive insurance, drive safe, and if you crash it, just do the barebone repairs.
Avoid Coverage Gaps
If you have insurance and it is about to expire, never let it expire. Even though you will not be driving, get a gap insurance policy or renew the previous one. A gap in your insurance (when you had no insurance at all) will increase the cost of both insurance and premium when you go to purchase one later. It is a very pointless reason that increases insurance premium prices and can be avoided easily.
Take Defensive Driving Course
Many insurance companies such as Geico, State Farm, etc offer special discounts on their insurance plans and premiums for people who have taken a defensive driving course or something similar. The course varies from company to company and you should contact your insurer and get all the information regarding this discount. To enroll in one and show your insurer that you are less likely to crash a car and get lower premium prices.
Prevent Roadside Assistance and Add-ons
Some add-ons such as engine protection coverage, roadside assistance plan, etc can drastically increase the price of your auto insurance premiums. Add-ons are only important when you have necessary use for them. For example, get roadside assistance only if you drive long distances frequently. For my daily commute, it is worthless.
Choose Pay as You Go Insurance
For low-mileage drivers, it is better to switch to pay-as-you-go insurance plans where the price is calculated based on how much you drive your vehicle. The less you drive, the less it costs.