Am I Paying too Much for Car Insurance?

More than half of policyholders pay too much for auto insurance according to Progressive insurance company report. Another report shows that nearly 2/3 of policyholders don’t even know about it since they never get alternative quotes. You know how much is your premium and maybe asking why am I paying too much for car insurance. As you can guest there is a formula used for premium calculations. Several things affect this formula more than other factors. Let’s have a look at those items that affect your rates and see if we can figure out how to reduce vehicle insurance costs.

  1. Is Auto Insurance too Expensive Because of the Way You Drive?

Who will drive the insured vehicle is one of the most important questions asked while getting quotes. Particulars of main driver and owner of the vehicle is the most important although having a teenager on the list of drivers will increase your costs considerably. Here are a few of the questions that matter.

  • Have any of the drivers had an accident and details of them?
  • Have any of the drivers had traffic related convictions and penalties on license?
  • How many years you and other listed drivers have been licensed to drive?

Depending on your answers your premium can go up or down. And at times it can go up as much as twice as soon as you add a bad or teen driver onto the policy. You probably know this but you need to mind the way you drive and reduce premium by reducing accidents and tickets.

  1. Is your Car Insurance Premium too High for What You Drive?

As much as your details and history the details of the cars to be insured has to be looked at as well. As you know automobiles come with different price, speed and attractiveness. They also have different safety and security features to take into account. Here are the key points to look at when you are buying a new automobile;

  • Is your car one of the safest and securest models in the market?
  • Is it one of the frequently stolen autos or not?
  • Is it expensive to replace if it is totalled?
  • Is it expensive to repair after insured damages and losses?
  • What is its insurance rating and possible costs?

When the insurance rating of a vehicle is low it generally means that it is cheaper to insure it. You can guess the possible premium charges by looking at the price and horse power under the bonnet. But why would you want to guess when you can check how much you are likely to pay by getting insurance quotes before buying a car quickly and easily online? One of the most effective ways of reducing car insurance is to choose your automobile right.

  1. Are You Paying too Much Auto Insurance for Where You Fit?

I saved on auto insuranceCompanies generally group people who have similar risk profiles due to their age, gender and several other factors. If you are considered one of the safer types of drivers you can qualify for discounts. You can qualify for discounts because of your profession or membership to a professional organization. Even AAA membership may qualify you for discounts. If you are a middle age person who owns his home, lives in a nice neighborhood, has perfect credit score and a respectable job, you can expect to get a few good discounts and reduce rates.

  1. Where You Live Can Help You Lower Car Insurance?

Most motorists drive around their home and between home and work. So, it is important where home and work are located. Your zip code would have been already checked and risk profiled. Here are the important questions regarding your home address;

  • Do you live in a high auto crime and vandalism area?
  • Do you live in a congested area and is it a city?
  • Is your work far from home and do you commute every day?

If you answered yes to those questions you probably are facing higher auto insurance costs. If you answered no to them you can enjoy lower rates. Also, the type of property can save you money. For example, living in your own home and having private parking are couple of the reasons how you can reduce costs. Also, bundling home and auto insurance can save you another 10 – 15% on overall premium.

  1. Are You Paying too Much Car Insurance for the Coverage You Choose?

Like anything else how much you add to your basket will affect your costs. You will have to buy the minimum liabilities coverage enforced by your state. Anything above this amount is totally up to you. Here are the basic outlines of coverage requirements;

  • The more you add the higher the premium will get but it may not be as high as you are worried. So, always get quotes for various levels of coverage and see the price difference.
  • The higher the deductibles the lower the premiums will be. Again, get quotes for higher and lower deductibles and see if it is worth to increase it.
  • You get better protection when you choose sufficient coverage. So, there is a trade-off between saving on costs now and not getting covered properly. Try to find a balance. As a general guideline, insure the risks that you cannot cover out of your pocket.

If you are concerned about the costs you should try to find a package policy that offers most things you want to be included. You can still add or take away one or two items in the package. However, it would cost you a lot more if you try to customize a policy that was nowhere near as good at the start. So, try to cut costs by choosing what goes into your policy carefully.

  1. How to Reduce Car Insurance Costs by Driving Less

Your yearly mileage is asked and taken into account. As a simple guideline, the more you drive the higher your chance of having accidents. If you are driving particularly low miles you will be saving money. And if you are driving more than average American drivers you will be paying more.

Therefore, keep a record of your yearly mileage and tell this to your insurer. Some companies try to estimate this figure looking at figures like your age, work and gender. If you are driving less than your colleagues or similar people of your age because you prefer public transport you will lose out. The solution is to give them the right information so that your quote is accurate.

  1. Find out the Discounts You Qualify for Cheaper Auto Insurance

You may think that your auto insurer will automatically look for every discount you qualify and apply it to you. This is not usually the case and you need to update your details regularly to be eligible for more discounts. Call your agent at each renewal and go over all the savings you can qualify. A good agent will ask the right questions to check your eligibility for the discounts they offer.

  1. Am I Paying too Much for Automobile Insurance as I Don’t Shop around?

Make sure you shop around at each renewal so that you can find the best deals or find out if you are getting the best deal from your current provider. Here are a few reasons why you should be shopping around by getting several quotes at each renewal.

  • Changes in your life, cars, other listed drivers or formation of the auto insurer can change the competitiveness of your carrier. For example, another company may be cheaper after you replaced your automobile with a different model.
  • Other companies may be running promotions and offering special discounts to new customers.
  • Also, there may be very attractive policy packages that are sold at highly discounted prices to attract more customers. So, you get more coverage even though you may be paying the same or less than if you stayed with your current insurer.
  • You really can discover a great company you didn’t apply before. That is why you need to get several quotes to see who offers what.

Reducing vehicle insurance premium a few hundred bucks would be great and even better if it only took you less than an hour to find the cheaper policy. You are free to check as many companies as you want, abandon your search whenever you want and choose whatever company at the end.

  1. How You Pay your Car Insurance Premium Can Help Cut Costs

Don’t be naïve by thinking that your insurer is great because they are allowing you to spread the premium payments. Premiums are due at the start of the policy. If you are allowed to extend the payment period you are most likely charged credit facility fees. Alternatively, the company may offer you lower rates for paying up front weather they charge for credit facility or not.

Always ask how much interest you will be charged on top of the premium if you spread the payment and if there would be discounts if you paid all now. This is one of the easiest ways of reducing auto insurance premiums.

10. Am I Paying too Much for Vehicle Insurance Because of Money Problems?

If you are good at money management and you haven’t encountered a serious event like loss of job that affects your ability to pay then your credit score is probably good. Most companies would offer generous discounts to motorists with good credit score. You should always try to make the most of it if you have a great credit history. And you should try to bring down the effects of it if you have a bad credit score by looking for best car insurance with bad credit.

Being married or single, insuring all your cars under one policy or separately and even the college you graduate can make a difference to your vehicle insurance costs. We have only listed ten most important factors that affect how much premium you pay. You would do well to find reliable and competitive insurers because premiums are repetitive expenses. The savings would be substantial over many years of driving. So, this is how to lower car insurance premiums and hopefully you will benefit from these tips.

Share on Pinterest
There are no images.