Considering that auto insurance is one of those expenses which do not provide immediate benefits, we often wonder why we need the coverage. Of course, that is until something happens and we are grateful for that insurance policy which we had been moaning about previously. However, that doesn’t mean insurance costs shouldn’t be managed which means looking for the cheapest auto insurance and managing risk to make sure those premiums don’t hit the roof.
Finding the cheapest auto insurance can often be a matter of simply shopping around but there are also certain steps you can take to make sure your car insurance costs are as low as possible. You need to consider your insurance costs even before you buy your car as there are certain makes and models that are much cheaper to insure than others.
Research the Cheapest Auto Insurance
When buying any insurance policy, don’t go to the first insurance company you find and buy without researching all the other options available. You will need to get quotes from at least three different companies and you may be surprised how much prices differ from one company to the next.
However, when researching the cheapest auto insurance you also need to look into the financial stability of the company you will be buying from. After all, you are buying insurance to protect yourself financially and not dig yourself into a deeper whole by going on cost alone.
Effect of Deductibles on Insurance Costs
Another way to make sure you will be getting the cheapest auto insurance is by asking for higher deductibles. The latter represent the amount of money you will pay yourself before your insurance takes over. A higher deductible can save you as much as 30 percent on collision and comprehensive coverage, or even more, depending on how high you go. For example, a $1,000 deductible can cut your insurance costs by more than 40 percent.
Your credit record seems to have an increasingly important role in your life and now extends to your insurance as well. More and more insurance companies are relying on credit scores to determine the degree of risk you present and pricing their policies accordingly. It seems that, statistically, people with lower credit scores tend to file a larger number of claims and thus present a higher risk to the insurer.
The older the vehicle, the lower its value will be and often comprehensive and collision coverage are not justified. If the value of the car is less than ten times the premium then the coverage probably doesn’t make sense. So, to make sure you get the cheapest auto insurance drop comprehensive and collision coverage on your older vehicles.
The cheapest auto insurance may not necessarily be from the lowest offer but could be the result of a volume discount. There are certain insurance companies that will offer a significant discount on group insurance which usually means buying through your employer, business groups or other associations. Also, consider asking if you get a discount by purchasing all of your insurance from the same company, including your homeowner’s insurance and health insurance.