How to save on car insurance?

Auto insurance is a must if you own a vehicle, but no one wants to pay a rupee more than what is required. By knowing what factors affect the auto insurance premium rates you will be able to get a good coverage while protecting your finances. Remember car insurance is not a fixed cost that you need to spend every month. So don’t be complacent. There are discounts offered and you should be aware of them in order to grab them.

Here are 5 best ways that will help you save a considerable amount of money on car insurance each year.

  1. Increasing the deductibles – A deductible is the amount that you pay from your own pocket before you get the benefits of insurance at the time of filing a claim. If you raise your deductibles it will lower your annual premiums on car insurance Of course there is a trade-off involved as it increases your risk exposure. You will have to shell out a greater amount in case of an accident. Also you will not reach out to the insurance company for smaller repairs where the cost involved is less than the deductible that you have set. This route of saving money is advisable only if you have a history of safe driving. If your driving history is not very impressive then this option may not work in your favour. It will not make sense to pay high deductibles at the time of claims when accidents occur to save a few hundred rupees every month.

 

  1. Buy only what you need– Your insurance needs when you buy a brand new car and take out a car loan to pay for it are completely different than when your vehicle becomes old. When you have a car loan you are required to take a comprehensive and collision coverage. Collision coverage comes in handy in case of an accident while a comprehensive coverage pays for car repairs that occur due to theft or natural factors. When you buy an insurance cover carefully assess what you need. If you do not have enough savings to pay for repairs in case of damage or theft you would definitely need a strong financial safety net in the form of comprehensive and collision coverage. But if the car model is very old and the annual premium does not justify the car value you may give up on certain protections.

 

  1. Drive carefully to seek discounts– Insurance companies offer a lower premium to people who have not had any violations of traffic rules or accidents in a specific period. So if you have a good driving record you can reap its benefits by saving on auto insurance rates. Driving fewer kilometres per year and taking advanced driving courses also helps in grabbing some discounts. So if you’ve engaged in carpooling or if your office is near to the place of residence you can reach out to the insurance company to get lower premium rates.

 

  1. No claim bonus– If you do not make any claims under your existing policy you can get rewarded for it in the form of no claim bonus. Once the policy matures you can use this bonus to renew the policy at discounted premium rates.

 

  1. Good credit history-A good credit score can help you secure low insurance premiums. People with a good credit are considered to be safe drivers who do not file many claims, while people with a bad credit are considered as risky drivers. While this may seem illogical to you, insurance companies base their decisions on this rationale. They use the credit score of an individual to gauge the risk and determine the rates for the car insurance policy. So if you have an impressive credit history you can save a lot of money on insurance premiums.

 

  1. Shop around- There are a number of factors that affect the insurance rates and the only way to ensure that you pay the lowest premium possible is to shop around. Car insurance rates differ considerably between companies even for the same level of coverage. So get quotes from several insurers to compare the offers and select the best deal. There are various websites that help you get multiple online quotes at once and even compare them conveniently from the comfort of your home.

Saving on car insurance is all about knowledge and research. If you invest time and effort in understanding the factors that affect the rates and work on them to use them to your advantage you are sure to get the best deal.

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