Save money on your auto insurance: Money-saving car insurance tips
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We all want to save money on things, and there's no shortage of ways to do it. But the auto insurance industry is different—the stakes for getting the right policy are high, something that only makes sense when you consider how much liability auto insurers are on the hook for should someone get injured or killed. They need your business!
Luckily, there are some tricks you can use to make sure you're getting your money's worth without taking unnecessary risks like buying a (very expensive) one-page policy or not driving enough in order to cancel your insurance.
Save $100s on Auto Insurance
Before you get a quote online, go through these basic steps. Buying auto insurance is a little bit like buying a home—it's better to do your homework first and not just start looking at houses (quotes) and then figure out what you need later.
Get quotes from several companies. Most states have multiple auto insurance providers, each with its own rates and discounts. For example, in my state of Ohio among the top four providers are State Farm (which happens to have its company headquarters in my hometown of Bloomington), Progressive Corp., Nationwide Mutual Insurance Co., and Allstate Corp. Combined they likely covered about 80% of the drivers in Ohio in 2011. Shop around and even call each of the four for customer service information. In Ohio, consumers can also get a quote from the Ohio Insurance Institute, which provides a single quote for all the companies (except there's no price comparison).
Most states have multiple auto insurance providers, each with its own rates and discounts. For example, in my state of Ohio among the top four providers are State Farm (which happens to have its company headquarters in my hometown of Bloomington), Progressive Corp., Nationwide Mutual Insurance Co., and Allstate Corp. Combined they likely covered about 80% of the drivers in Ohio in 2011. Shop around and even call each of the four for customer service information. In Ohio, consumers can also get a quote from the Ohio Insurance Institute, which provides a single quote for all the companies (except there's no price comparison). Compare prices. You can do this by comparing premiums across the states by group or simply checking out what each company is offering. That way you'll see how much more or less one company is charging than another in your particular state. For example, I saw an average base premium of $2,199 for Allstate with a discount of 15% but Progressive was cheaper at $1,958 and had a 10% discount. Depending on the state you live in and your driving habits, you might be able to save hundreds of dollars by switching companies.
You can do this by comparing premiums across the states by group or simply checking out what each company is offering. That way you'll see how much more or less one company is charging than another in your particular state. For example, I saw an average base premium of $2,199 for Allstate with a discount of 15% but Progressive was cheaper at $1,958 and had a 10% discount. Depending on the state you live in and your driving habits, you might be able to save hundreds of dollars by switching companies. Get discounts . There are two ways to do this. First, ask the company to beat its price in last week's quote sheet. Other ways include: redeeming coupons or by being a loyal/qualified customer (by having a good driving record, for example).
. There are two ways to do this. First, ask the company to beat its price in last week's quote sheet. Other ways include: redeeming coupons or by being a loyal/qualified customer (by having a good driving record, for example). Ask if they have any pre-purchase discounts . Some insurers will offer a price break if you choose a particular deductible level. It requires some comparison shopping but it could save you money on your premium.
. Some insurers will offer a price break if you choose a particular deductible level. It requires some comparison shopping but it could save you money on your premium. Find out other ways to save money . Advance safety features, anti-theft devices, good student discounts, and clean driving records can all result in cheaper premiums.
. Advance safety features, anti-theft devices, good student discounts, and clean driving records can all result in cheaper premiums. Get quotes for more than one vehicle . That will help the insurer determine if you are a "risky driver" or if you have a safe driving record.
. That will help the insurer determine if you are a "risky driver" or if you have a safe driving record. Ask about umbrella insurance. This additional coverage serves to protect your assets should you get into an accident that results in significant damages or liability for your actions. It's more of an investment (i.e., costly but worth it) than an insurance purchase but it can reduce your exposure to outside lawsuits and claims of professional affiliations (such as doctors, lawyers, and accountants).
Be Prepared to Pay More for Auto Insurance
Even if you do everything you can, some people will still be turned down for auto insurance or offered rates they cannot afford. These are the people who can benefit from a high-risk insurance pool: You pay more than the average driver, but at least you are protected in case of an accident. The state where you live in will likely have more information on the program it runs for those who cannot get coverage elsewhere. If not, look up your state's department of insurance and see how it can help with your rate or purchase.
The Bottom Line for Auto Insurance
If you have a perfect driving record and you don't participate in any risky activities, then auto insurance probably won't be an issue. Even if you do plan on driving like a maniac, there are still many ways to save money on your premium. But if your record is less than perfect or you're involved in another activity that could potentially get you into trouble, see what's available and compare prices with other companies for the best deal. If possible use all of the above techniques; otherwise, shop around and keep asking questions until it's clear what's right for you. Buying car insurance is an aggravating process but when done correctly can be very rewarding.
Conclusion
Insurance is a complicated subject, but it's not as hard as people make it out to be. If you follow the tips above, and do your research on the company offering the cheapest auto insurance in your area, then you should have no problem shopping for the best driver's insurance rate you can afford. In addition to shopping around, ask around for tips about different companies and their auto insurance products that can help lower your premium. A little bit of extra research can go a long way in securing low-cost coverage. Happy shopping!
How do I get free quotes? How do I compare these quotes? When considering which insurance company provides the best quote, take time to compare and contrast these quotes.