So you've searched the web and gotten the best insurance deal you could find, and that's about as good as it gets right? Not quite. Although choosing the most affordable car insurance in your state is a good place to start, there are several things that you can do to make sure you continue to get the best possible price on car insurance.
- Drop Unnecessary Coverage
If you've had the same insurance policy for several years it may be time to review your policy to see if you are paying for coverage that you no longer need. For example, your car may no longer be as shiny and new as it used to be, and it might no longer be worth paying for comprehensive coverage. If your car doesn't have much resale value anymore, you may even want to consider dropping collision coverage. Unless you have agreed-price coverage (where the insurer agrees to pay out a fixed benefit), most insurance companies will only pay out a benefit based on the car's current value, which may not be much more than what you pay for the coverage. Some credit cards offer roadside assistance that may be just as good as what you get from your insurance company, and if you have one of these cards then roadside assistance may be another unnecessary coverage. If you haven't fully paid off your car, then you will probably have to keep most of these coverages.
- Review Your Deductibles
One of the most effective ways to lower your insurance premiums is to raise your deductibles. If you are a good driver and live in an area with a low accident rate, it may be cheaper to lower your insurance premium by raising your deductible, then you can put the money you save in an interest-earning account. On average you will pay up to 30% less for a policy with a $1,000 deductible than you would with a $100 deductible. That may only come to a few hundred dollars saved every year, but how often do you have accidents? Think of the interest that the extra $900 could earn before you ever make a claim (if you ever do). Of course if traffic accidents are a part of your yearly routine, then you may want to stick with that $100 deductible.
- Get A New Car
The car you drive has a lot to do with how much you will pay for insurance. Sports cars and performance vehicles usually command the highest premiums, while family mini-vans and 4x4s are often the cheapest cars to insure. The cheapest cars to insure vary from state to state, and the cars you like may or may not be among them. If getting the most miles for your money is your primary concern, then getting a low-premium car is a good way to save.
- Buy A Home
If you have bought your own home since getting your insurance policy, then make sure to let your insurer know before your next renewal. Many insurance companies, including nationwide insurers like Esurance and Progressive, give you a discount on car insurance if you own your own home. You can also save on car insurance by getting your homeowner's insurance from the same company. For example, Allstate gives you a discount of up to 25% on your auto insurance when you get homeowner's insurance from them as well (you also save up to 35% on your home premiums).
- Raise Your Credit Score
Improving your credit score can also lower your insurance premiums. This may sound crazy, but statistics show that people with higher scores have fewer accidents, while those with lower scores are more likely to have an accident. If you live in Massachusetts, Hawaii, or California, your credit score won't make a difference as insurers are not allowed to base your premiums on your credit score in those states. Everywhere else, a better credit score will probably mean a better deal on your auto insurance. The best way to raise your credit score is by regularly using a credit card to make payments, and then paying your credit card bill on time every month. You can check your credit score using FICO® Score Watch or get it for free with many Discover and Barclays credit cards.