We are often told that you cannot negotiate with your car insurance company. Is this really true? A more important question is that how are premiums calculated? The point you need to know is that they don’t probably just drop your premium without a reason. However, you can quickly count 20 reasons why you should get cheap auto insurance. We have counted 10 of those reasons below for you to check with your vehicle insurer at the next renewal.
Pick up the phone and start asking open-ended questions to determine that they have taken everything into account and given you the best rates. Make them work for you. Otherwise, they will probably let their computers spat out a renewal figure for you based on the details they have and the rates they set for you previously. But those rates can change if you can qualify for a safer category and further discounts or avoid surcharges.
Many policyholders don’t like the idea of appearing to be complaining and do nothing even if their premiums increased for no reason. That is why auto insurance price optimization can be a very profitable undertaking for insurers. You shouldn’t complain about your high premiums either if you aren’t prepared to ask questions like why did my car insurance go up?
- Can I Get Low Mileage Discounts?
They don’t have crystal balls to tell what you do. If they did they would never insure the drivers that will submit a claim. Many policyholders don’t share enough information with their insurers, good or bad. Some policyholders are actually scared to call insurers because they worry about premium increases. If you notice that you have not been driving much you should find out how many miles a year you drive and let the insurer know. Otherwise, they will calculate your premium based on national averages or use their own formulas to guess the mileage.
You may have given up on taking the car to your regular holiday destination thousand miles away. You may not be taking as many road trips as you used to. In addition, changing jobs can substantially reduce your mileage. You may have switched from being a regional sales supervisor with thousands of miles of driving to an office job near home. Talk to your insurer and ask them if these changes qualify you for discounts. You can get big savings depending on your current mileage bracket. Also, the size of premium reductions will depend on the firm insuring you.
- How Safe A Driver You Think I Am?
Every year you become a more experienced and accomplished driver. This is especially true if you haven’t had any traffic violation ticket or made any claim for some time. There are mile-stones along the way. For example reaching to your first five years of driving is a milestone that should reduce your rates.
Your claim and driving records can save you up to 50% with some insurers. You should also get multiple car insurance quotes to see how other insurers view you and if they would offer better rates for the same coverage. You should definitely do it if you think you are a safe driver and still not getting good rates.
Also, traffic violation records get removed from your DMV files every 3-5 years depending on where you live and what is the severity of the violation. You should watch out for those periods and alert your insurer when your record is cleared of certain violations. Companies don’t regularly check for drivers’ DMV records.
- Can I Qualify for Further Discounts by Bundling Policies?
You may have several policies in place either with the same company or with different ones. You should explore which company will offer you the maximum overall discount if you move them to one company. If they are already with the same company they may not know the existence of those policies. For example, vehicle insurance department may not know that your home is insured with them as well. This knowledge alone can allow them to offer you up to 15% discounts.
Another option is to buy one policy for all your cars. Multi-car insurance policies are cheaper than buying separate coverage. Actually, you can insure each automobile separately under a multi-car policy. For example, your new car can have full coverage while the older one has liabilities only cover.
- Can I Get Discounts for Taking a Defensive Driving Course?
If you have taken any driving course recently let them know anyway. If you are considering taking a course to get cheaper auto insurance you should find out what courses will give you the maximum savings, if any. Generally, states determine which defensive driving courses qualify drivers for discounts. Majority of states allow discounts when defensive driving is taken after the age of 55. Some states like New York are very generous and allow discounts after the age of 25.
Defensive driving courses are not the only ones that can qualify you for savings. Advance driving courses can help you get better rates as well. Some companies run their own online tests that qualify you for discounts upon completing successfully, too. There is no harm in asking this question. It may be that taking a one day course can save you up to 10%. This would be even more valuable discount if your premium shot up following a recent claim or speeding ticket.
- Can I Get Discounts If I Install the Latest Safety Device?
Technology moves fast and new devices come to market every day. Some of the tracking devices can work over your GPS or on-board computer. Others may be fitted discretely within your vehicle. As they become more commonplace their price drops dramatically as well that you can afford to fit them for your own peace of mind.
If you are considering such addition it is best to ask your insurer which devices and brands they approve before going ahead and getting the work done. Little insider knowledge can help you increase the discounts. You can get up to 20% savings depending on the type of car and number of security measures. For example, if you have an expensive car that is auto thieves’ favorite you can probably get large savings when you install a tracking device or remote immobiliser.
- How My Credit Score Affects My Car Insurance Premium?
This may not be a million dollar question but it may still be worth hundreds of dollars. Credit scores can affect premiums as much as 25% up or down. Some insurers use them as their crystal balls to tell if someone is going to make a claim. Many studies have shown that people with lower credit score are more likely to make a claim.
Paying off your car or personal loan and credit card balance can push your credit score from “poor” to “good” that consequently will reduce your premium. You can easily check your own credit score and see where you are and where you have been. If you see that your score have been improving recently you should point this out to your insurer. As mentioned above, companies don’t necessarily check these things often and adjust your renewal accordingly.
- Can I Get Lower Premium by Increasing Deductibles?
Increasing Collision and Comprehensive Deductibles can be a good way of saving money on vehicle insurance especially if you haven’t had a claim for some time. This suggests that you are a safe driver and unlikely to have series of claims suddenly (though it is possible). You may think that it is worth taking the risk if you have sufficient savings to cover for the increased deductibles.
Most companies will offer some sort of discount up to 10% when you double your deductibles. You need to check how much your costs will come down and decide if it is worth doing it. The amount of savings differs depending on companies and some companies may not actually offer any meaningful benefits. That is why getting alternative quotes and comparing can help you save (again).
- Does It Pay to Drop Collision & Comprehensive Coverage for Older Vehicles?
If you have an older car that is worth less than $5,000 you may consider dropping these two covers. You may take a chance to get a new car if something happens to them. In such cases you may be able to avoid making a claim as well. If the accident was an isolated incident you may just send it to a crash yard and get a new car.
When you are making notable changes to your coverage, address or automobile you should always get alternative quotes in order to avoid missing out on larger savings somewhere else (again). For example, there may not be much of a price difference between liabilities only and full coverage polices sold by some companies. You need to find out if you will get a discount by dropping some coverage and decide if it is worth doing. You can usually get about 20% savings with many companies if you strip the collision and comprehensive coverage.
- How Does My College Based Child Affect My Rates?
Adding teenage drivers onto your policy can easily double your premium even with good driving records. It should be the opposite when they leave home. However, there may be cases where they are mostly away but not left home yet (you may think). Large numbers of youngsters go far away colleges to study and they don’t take their cars with them. They may have left them behind with their parents and they will drive them (or parents’ cars) when they are on a break from the school.
Quite a few parents don’t share this information with their insurers and leave their policy as it is. As a result they may be missing out on large savings. Technically, your child may be classed as resident in the college (instead of your home). This would affect your rates drastically in a positive way. If your current insurer don’t seem to care either ways and still wants the same money, you should talk to other insurers as the savings would be large (again).
10. How Does My Age Affect My Premium?
You don’t need to be shy talking about your age. They already know your age even though they don’t send a card or flowers. But do they check the milestone points and make sure you benefit from them? Everybody start with high premiums when they are teenagers. Once you are over the age of 25 you reach a big milestone in terms of car insurance rates. Your premium should come down noticeably at that point. If it didn’t, get a few quotes from other providers (again). Now that you are over your young years there will be many companies willing to offer you cheaper vehicle insurance. Read this post titled; does car insurance go down at 25?
Furthermore, studies show that people between the age of 55 and 75 get the lowest premiums. This is considered your most mature driving years. So, 55 is another age that can affect your rates and you should do the same as you would at 25 and search for the best deals. (Again) the way companies assess different age groups differ considerably.
And you should talk to them again when you retire. Then you would probably be driving less because you wouldn’t commute anymore. Depending on your circumstances this could turn you into occasional auto user from a regular commuter.
Another point to discuss is how to insure family cars. With a little planning you can get the lowest possible rates. For example, your wife may be slightly older than you that insuring your family cars under her name might be more economical. Being older, female and the policyholder can allow her to get lower rates than you (younger male driver). The rest of the drivers in the family would be listed in the policy anyway. This is one option worth discussing. Most companies wouldn’t have a problem with such arrangement.
Always keep in mind that material changes in policyholders’ and listed drivers’ particulars, cars, jobs, addresses can affect auto insurance premiums considerably. Not only you should talk to your insurers about them but also you are required to notify them of these changes. It is one of common policy conditions.
As mentioned several times above (again), you should also get a few quotes and compare coverage and prices. These changes or life stages have the effect of making your insurer less competitive when compared with competition. For example, switching to a sports car, adding a teenager to a policy and moving to a city center are some of the things that have the potential of doubling your premiums.
In such cases you cannot just accept whatever the new price with your current insurer and carry on. You have got to check alternative insurers for their terms and prices. Even a millionaire would look into all the possibilities of saving money. That is how they become millionaires.