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1. Shop Around - Different companies charge different rates for the same coverage. Check your state insurance department’s website to see if the carrier you plan on going with has a high number of complaints and use online resources like Bankrate.com to cross-shop insurances rates.
2. Maintain Good Credit - About 10 years ago, insurance carriers started using credit history and insurance scores, which are essentially credit scores with other factors thrown in, to determine premium rates. Click here to find out how to obtain your credit score and how to improve it so that your premium might be lowered as a result.
3. Avoid Cars with High Repair Costs - Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Certain cars, like exotic sports cars and high-end luxury sedans, can be expensive to repair, so choosing not to buy one of those can have a big impact on insurance costs. Find out more about ownership costs that affect insurance rates here.
4. Look for Safe Cars - Many insurers offer discounts for features that reduce the chance of injuries or theft. These can include side airbags, anti-lock brakes, and daytime running lights, and anti-theft devices. Some states require insurers to give discounts for cars equipped with airbags or anti-lock brakes. Search for vehicles according to safety features and crash-test ratings here.
5. Get all Available Discounts - Taking a defensive driving class can bring a 10 percent discount on insurance. State Farm says that students with a GPA higher than 3.0 can get a discount of 25%, which is especially helpful because rates are generally higher for young drivers. Discounts are also available for retirees and members of certain associations, such as your alma mater or military group.
6. Raise Your Deductible - Jack Hungelmann, author of ‘Insurance for Dummies,’ suggests raising your deductible to something around $500, which he says most people can afford. Doing so may lower your premium or allow you more liability coverage, which he suggests is a good thing considering that critical-care costs can easily run into the 6 figures these days. But beware of duplicating coverage.
7. Reduce Coverage on Older Cars - Consider dropping collision and/or comprehensive coverage on older cars. ‘It may not be cost-effective to continue insuring cars that are worth less than 10 times the amount you would pay for coverage,’ says Mike Barry, VP for the Insurance Information Institute. ‘Any claim payment you would receive would not substantially exceed your premiums minus the deductible.’ Auto dealers and banks can tell you the value of a car, or you can look it up online at the Kelley Blue Book or National Automotive Dealers Association websites. Review your coverage at renewal time to make sure your insurance needs have not changed.
8. Drive Less - Pay Less - Some companies offer discounts to motorists who drive fewer miles. Low-mileage discounts can also apply to drivers who carpool to work. In the past 10 years, Progressive has been a leader in installing devices in automobiles, called TripSensors, that measure the amount you drive and the company offers discounts of up to 25% for those who drive the least. But so far Progressive has only conducted the experiment on a pilot basis in several states and has yet to roll out a national program.
9. Be Wary of Optional Coverage - According to the National Association of Insurance Commissioners, insurance that covers medical bills of drivers and passengers is not usually required in states without no-fault laws. ‘Be cautious when purchasing this coverage, for they can duplicate coverage you might pay through other insurance policies,’ the NAIC says. For instance, medical-payment coverage might duplicate health or disability benefits you buy individually or receive as a benefit through your job. Towing coverage may be relatively inexpensive, but you might also receive it through membership in an auto club.
10. Save Money Through One-Stop Shopping - Many insurers will give you a discount if you buy 2 or more types of insurance from them, according to the III’s Barry. You may also get a reduction if you have one or more vehicles insured with the same company. Some insurers reduce premiums for long-time customers. ‘But shop around, you may save money buying from different insurance companies despite the multi-policy discount,’ Barry says.
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