Tips for Lowering Your Auto Insurance Premiums

If you have not reviewed your auto insurance policy within the past two years, you may want to consider the following steps that could help you save money. Although these tips are designed to be helpful, keep in mind that your driving record and the area where your car is domiciled can significantly influence your premium.

• Ask for a discount. Some insurers offer discounts for policyholders with low mileage and for households that purchase homeowner’s insurance and car insurance from the same carrier. Policies that cover teen drivers may charge less if the teenagers have completed driver education. Note that some carriers that offer many discounts or generous discounts charge higher-than-average rates.

• Shop around. Several weeks before your existing policy is set to expire, comparison shop among several carriers. When asking for quotes, be sure to make an apples-to-apples comparison on the type of coverage provided.

• Switch to a higher deductible. Depending on the amount of the increase, you could ultimately save between 15% and 40% on collision and comprehensive coverage. Keep in mind that a higher deductible will mean that you will bear a higher portion of the cost if you have an accident or if your vehicle is stolen or vandalized.

• Consider dropping certain coverage. For older cars with low market value, consider dropping collision or comprehensive coverage. These types of coverage may no longer be worthwhile because the amount of a claim probably would not exceed the combined value of the premium and the deductible. To determine the value of your car, visit www.edmunds.com.

• Pay your entire premium up front. Many carriers charge extra when drivers pay in installments.

• Research the insurance costs of any new or used vehicle you may purchase. The year, make, and model of a vehicle impact insurance rates. Insuring new, expensive, and sporty cars tends to cost more than insuring older and more economical vehicles. In addition, you may pay more to insure a car that has a higher theft rate or that has a record of higher-than-average insurance payouts in accidents. To learn how a particular vehicle compares with others, visit the Web site of the Insurance Institute for Highway Safety at www.iihs.org.

Although price is important, in the end, remember that the objective of auto insurance is having the coverage you need in the event of accident, theft, or damage.

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