Every driver is unique and policy requirements are as different as people. While some don’t mind paying a few dollars extra for a deluxe coverage, a few motorists would need the most affordable auto insurance. There is no right or wrong when it comes to making a policy choice. But vehicle owners should determine the level of coverage they need and try hard to get it within their budget, rather than the other way around.
When you have good income it may not be crucial to find affordable automobile insurance policies. However, loss of job, reduced earnings or need to save money can reduce spendable income considerably so that it becomes a priority to reduce costs.
You will quickly see that we are not advocating to get the cheapest policy but obtaining a decent protection by finding more reasonably priced vehicle insurers. Hopefully, the difference is clear. Prices in the market fluctuate a lot more than people realize.
1. Coverage You Need and Can Affordable
All being equal, liability only is the cheapest auto insurance and you must at least buy this to comply with the laws. If you go for it you must understand its shortcomings, as it is pretty basic and only provides a defence against third party claims. However, the most popular policy type in the US includes protection for own vehicle too, with more than 72% of motorists buying Collision and Comprehensive as well. That is why we suggest that you should try to find cheap full coverage using the tips below.
Before you look to find the most economical car insurance policy you may want to think about what level of provisions you will be comfortable with. As a general rule, the more the better. But you will have to find a good balance between costs and coverage. One thing to keep in mind is that you don’t want to make matters worse by dropping essential protection as discussed above.
Drop coverage when you are able to handle a loss on your own. For example, if the automobile is worth about $5,000 and you are confident you can handle this amount of loss if it is totalled you can drop it. This may save you some money now. If driving and claim histories are good, chances of having an accident would be low as well. Perhaps an old car will die before it suffers a loss. Then, you will need the money to buy another vehicle and insurance premium savings you put away can help you there.
2. Learn about Discounts
By now, you have a good idea about what type of risk you are. If you are a low risk you will be offered good discounts by most automobile insurers and they can easily halve premiums. Some of these discounts are offered for being a good driver, homeowner, having no accident, good credit score, living in a safe zip code, owning a safe car and driving less. Find out which ones you can qualify for and go for it.
3. Manage the Credit Score
When you know you may run into money problems, be active and manage spending. If you let some of the bills sit unpaid you will see a drop on the credit score. Most states allow it to be used in premium calculations and most automobile insurance companies use them. First, try to cut some of the expenses and create some cash.
If you feel that the score is going to go down, try to find the most affordable automobile insurance company now and take a 12 month policy. This way you will be ahead of the game and fix rates for the next 12 months at least. If you are lucky the current carrier may not look at it again at the next renewal since they checked it recently already.
4. Choose Cars Well
Details of the cars is one of the most influential factors in premium calculations and so motorists need to choose sensibly when they want to get the most affordable auto insurance. You should look at the overall cost of auto ownership along with policy expenditure. For example, cars with high engine power are generally expensive to run and insure. If you are worried about filling the petrol tank every so often, maybe it is time to be more sensible about the autos you own. Not only petrol costs but also repairs on such automobiles can be really expensive.
Buying a sensible family car instead of a sporty one can save you a considerable amount of money on petrol, repairs and premiums. Insuring a reliable family automobile is generally cheaper in comparison with SUVs, trucks and sport cars. Furthermore, it may be time to trim the inventory. One or two reliable cars can be enough for a family so you may not need to keep that old clunker anymore when you have a replacement already.
5. Consider Driving and Accident Records
They will affect the premium as much as 40%. If you want the most competitive vehicle insurance rates you need to avoid getting speeding tickets and other traffic violations. If you are over 55 you can save around 10% by taking defensive driving courses. In some states including New York you can take these courses and get discounts regardless of your age.
Claims record is an indication of how good a driver you are as well. It is important that you have an honest assessment of skills and ability to stay away from accidents. This will determine the way you see the exposure. If you are not confident that you or the listed drivers can stay accident free you should have sufficient automobile insurance coverage for possible losses and keep deductibles low.
Otherwise, you will run into more troubles while you are trying to save money by choosing high deductibles and low coverage.
6. Consider Financial Reserves
If you have no or very little cash reserves, it becomes extra important that you choose a good level of coverage. Increasing it to a sufficient level will not cost you a lot more. But you will have a serious problem if you cannot get the automobile repaired following an accident or find the money to buy another one (if it is totaled). Most people are highly dependent on them to get on with life and get to work.
Again, you would probably reduce car insurance rates if you increase deductibles to $1,000 from $250. However, you would run into troubles if you cannot find $1,000 to pay for the deductible when you have an accident. That is why you need to have a costs vs. benefits analysis for every decision you make.
7. Higher Deductibles
If you see the chances of having an accident or face auto theft low and you have sufficient financial reserves you may consider increasing them. You should get two quotes, one with low and the other with high deductibles and see if you are saving enough for taking more risk.
8. Get a Few Quotes
Never settle for the first auto insurance quote you get. True that it may be the lowest price and the best coverage indeed. However, you need to test this by comparing a few alternatives. You probably know the level of coverage you need by now. Offer the same information to all of the insurance companies you apply to and compare the quotes you received.
Once you have a short list of competitive insurers, you can go to the state insurance department website and check how many complaints each company received and how they dealt with them. Remember to look at the number of complaints in the light of the size. One of them may have received fewer complaints but it may be a fairly small one in the market anyway.
9. Use Independent Auto Insurance Brokers
If you have already identified a particular and highly competitive company and like to buy through an agent instead of online you may be all right with a tied agent. Otherwise, you should look for an independent broker. They can talk to several insurers and choose the best deal for you. There is no harm in telling the broker that you have already got some quotes online and he/she needs to beat a certain figure if he/she wants the business. That is how you negotiate for the most competitive vehicle insurance rates they can come up with.
Remember you are looking for the best and this applies to brokers as well. If they are not willing to work for it perhaps they don’t deserve the commission. Brokers can be real handy if you are struggling to find the most economical car insurance rates. Good ones would know where to look for each client.
10. Check for State Low Cost Programs
If you are not having any luck with the search you can check to see if the state is offering low cost auto insurance policies for low-income drivers. California, New Jersey and Hawaii have such programs and some other states may have different arrangements in place. Generally they are available to low-income families and qualification requirements may apply. If you can qualify you can get a good deal for a basic policy.