With insurance costs becoming a major part of any family’s budget, we are all looking for ways to minimize expenses and get the best value for the dollar spent. This article will show you four ways to find cheap auto insurance.
1. Shop around.
One of our editors queried an insurance comparison website a few days ago to get quotes for his two mid-aged cars. The Liability coverage prices he got ranged from $1,053 to $1,881 – a difference of $828 per year, and this was only after querying four insurance carriers!
I bet you have shopped around and compared offers when you bought your car, your house and probably do it on your daily shopping too. The same should go with your auto insurance policy – don’t buy it from the first insurance company you lay your eyes on.
2. Raise your deductible
You should already know that Collision and Comprehensive insurance policies are subject to a deductible, an amount you are supposed to pay out of your pocket when you have a claim before the insurance company pays for the damages. A higher deductible will lower the average amount the insurer is going to pay you in settlements over the lifetime of the policy, hence you will be charged less.
Don’t go overboard with it though. Don’t go for an amount you can’t afford, as this tip is supposed to save money, not get you into unnecessary debt. If you have to get a second job or a payday loan just to pay the deductible after an accident, then it’s not a wise idea after all.
3. Improve your FICO score
Many insurance companies use your credit score to determine how much you are going to be charged. The reasons are quite simple – statistics show that drivers with a poor credit rating are also likely to be involved in accidents and file claims. In other words, you aren’t likely to be a responsible driver if you can’t pay your bills on time.
If you have a poor score, I urge you to start working on it now. There are many companies that can help you improve your scoring, and further details are quite outside the scope of this article. However, this doesn’t happen overnight. Fortunately, there are still companies that don’t query the credit bureaus altogether, or put very little weight on it when calculating your overall insurance score. Allstate, for instance, is known not to use your credit score at all.
4. Get a better education
While I certainly doubt that lower car insurance rates can be on top of the reasons why anyone would get a better education, it is worth mentioning that a lot of insurance companies use education level and occupation as important criteria in calculating your premium. GEICO’s statistics, for example, show that a supermarket salesman with a high school education is more likely to get involved in an accident (and file a claim) than the CEO of a company who holds a PhD.