Reducing the Cost of your Car Insurance

There are a number of ways to reduce the cost of your auto insurance premiums. Here are a few:

• Improve your credit score. It’s a fact insurers use credit scores, among other things, to determine insurance rates. This is just one more justification for the monthly ritual of paying bills on time, reviewing credit reports for inaccuracies and more.

• Always shop around. Needless to say, we all know by now that close proximity and long-standing relationships do not necessarily translate to the best deals. Comparative rates can be had by calling around or asking trusted friends for recommendations. Even better still, many companies provide tools to compare rates online as a service to users. A simple Internet connection will provide all the information you will ever need.

• Ask about low mileage discounts. If you live a short distance away from work or take part in carpooling, chances are you are in a good position to take advantage of low mileage discounts. Be sure to ask your insurance broker about benefits available to low-mileage drivers.

• Think about bundling your transactions. Brokers will definitely look favorable on the overall volume of business generated by an account. Doing business with other companies in the group or buying other insurance products from the same broker will more than likely translate to discount benefits.

• Think about the cost of insurance before purchasing that dream car. The insurance cost on a vehicle is determined by the price of the vehicle itself, safety record, measures taken to improve safety and more. Always do a thorough check into these factors before committing to that pushy car salesman.

• Don’t overpay for insuring an old car. A recommended rule of thumb is to see if 10 times your premium is greater than the value of the car. If it is, consider reducing the value insured or dropping unnecessary features from the insurance coverage.

• Ask your broker for higher deductibles. The deductible is the amount borne by you before the insurance company is required to pay. Higher deductibles mean lower risk for insurance companies and ultimately, lower premiums.

• Ask about and take advantage of a No-Claim Bonus. Each year on the road without an accident should improve your no-claim bonus standing. Be sure to ask your broker about their policy for rewarding an excellent safety record.

• Take advantage of Group Insurance schemes or other promotional programs offered by your broker. In the first instance, your broker may have lower rates for individuals who insure through group plans available through companies, or associations. They may even offer such on-going campaigns as “road angel” programs where women are targeted and rewarded for excellent safety records on the roads.

• Consider taking a Defensive Driving Course. Defensive driving courses are looked upon favorably by insurance companies and are often rewarded with lower premiums.

• Consider Third Party (or Liability) Insurance. As already discussed, in some instances, based on the value and/or age of the vehicle, it may make more sense to decide against the more costly comprehensive insurance and opt instead for liability insurance. However, while liability insurance could mean savings over the life of the policy, an accident that would require your being 100 percent financially responsible for the repairs to the other driver’s vehicle could quickly spoil the fun.