Insurance is something we buy hoping we’ll never have to use it. And — aside from the peace of mind it brings — car insurance does go unused more often than not.
Thus, it makes good sense to pay the least amount possible, while maintaining the best coverage we can. To that end, let’s take a look at some things we can do to reduce car insurance costs.
The best thing you can do in this regard is maintain a good driving record. Risk management is how insurance companies make their money. They don’t want you to use your car insurance any more than you do.
To insulate themselves from as much risk as possible, they charge drivers with accidents and/or moving violations higher rates for coverage so they can bank more money before the inevitable claim comes in.
Choose Your Car Conservatively
The ride you choose will have a direct effect upon the amount you pay for car insurance. Sleek and swoopy will cost more to insure than boxy and slow, for the obvious reason — they’re generally driven more aggressively.
However, sleek and swoopy also costs more to repair when it’s been damaged. Always get an estimate of the cost to insure a car before you buy it, just to make sure you can afford the car and its insurance. The Insurance Institute for Highway Safety maintains a list of the cars with the least amount of insurance claims.
Buy Your Car Thoughtfully
Leasing vs. buying a car makes insurance more expensive because leasing companies insist upon the full slate of coverages at the maximum limits of liability. They want to make sure there is enough insurance in place to absorb the costs of any possible incident.
Now, with that said, while leasing a car does increase insurance costs, that expenditure can often be offset by the lower monthly payments leasing affords. Always run the numbers before you decide whether to buy or lease if insurance costs are a factor in your decision-making.
Do Your Research
Shopping around is one of the smartest things you can do in any circumstance.
This is particularly true for car insurance because it’s a pretty competitive industry. Before going with a company just because they have a convincing advertising campaign, check with a wide variety of insurers. It’s easy to do with online quoting.
Accept More Responsibility
As we implied above, the more coverage you have the higher your cost will be. You can choose the amount of coverage you’d like an insurer to provide on your behalf (liability limits). The lower you go, the less your policy will cost.
Similarly, increasing your deductible (the amount you’ll pay on your own before insurance comes into play) will lower the cost of your policy as well. Going with a $1,000 deductible over a $200 deductible can make a significant difference in your monthly payment.
However, if you do have a claim, you’ll need to be prepared to pay the difference between what your policy covers and the costs of the incident. In other words, choose low limits and high deductibles carefully. They can save you in terms of what you’ll pay for your policy. However, they could be devastating if you’re to be at fault in a catastrophic event.
These are some of the most basic things you can do to reduce car insurance costs. You’ll find a more comprehensive list at the Insurance Information Institute website.