Every year, auto insurance premiums go up. Insurance companies seem to be in a never-ending cycle of increasing auto insurance rates for drivers across the United States.
Kansas City drivers looking to save on auto insurance might be surprised at the number of ways they can do so. Some people may think that just by purchasing a policy with a lower monthly premium, they're automatically saving money, but this is not always the case.
It's important to investigate all options for your particular needs in order to get the best deal possible. Here are 10 tips that will help you reduce your auto insurance costs:
Keep a clean driving record
The last thing you want after getting your driver's license is to get into an accident. Accidents, no matter how big or small, can land on your driving record and stay there for several years. A clean driving record comes with many benefits. It shows that you are safe behind the wheel, which means you will probably pay less for auto insurance.
Maintain Your Auto Insurance
A lot of people simply forget that keeping insurance policies active will lead to discounts.
The main reason keeping your premiums paid is important for maintaining discounts is because you're demonstrating responsibility. Auto insurance carriers reward responsible behavior, which means keeping your policy up-to-date.
Shop For New Rates Every Six Months
If you are looking to lower your insurance premium, shop new insurance companies every 6 months. Nearly all insurers will offer discounts if you renew your auto insurance policy, but a new company might offer lower rates.
Always look when it comes time to renew an auto policy in order to get the best rates possible. If you look around for new insurance rates, make sure that the insurer offers both competitive premiums and extensive coverage options before joining up with them. Just because one company has lower monthly premiums than another does not mean that they should automatically be chosen as the better choice overall.
Do not assume that just because an insurer offers low rates means that their services are the same.
Avoid Filing Small Claims
It's common for small claims to happen in the lives of all drivers, but small claims can end up costing you big bucks.
There are three types of claims that could be filed against your policy:
- Damage to another car or property
- Injury to another person while driving your car
- Property damage while parked on someone else's property
Many people file small claims without realizing that they will cause their rates to go up even if they are justified. And once you have filed a small claim, it will stay on your record for five years. That means if an accident happens after you file a small claim, but before the five years is up, it may still count as two accidents, which would increase your rates even more.
Another thing to consider is that if the damages are small and your deductible is more than the damages, your insurance company may not pay anything at all. So it's important to weigh all of the pros and cons before deciding whether or not to file a small claim.
Pay Your Policy in Full
Paying your premium in full at the beginning of each policy term saves you the billing charges associated with paying a monthly billing statement.
If you have fully comprehensive auto insurance, paying for a six-month policy period can save you one monthly payment versus paying for three months or paying every month.
If you set up automatic payments via checking or credit card, you will accumulate more savings through less billing charges accrued over time. There are many ways to save money while maintaining the insurance coverage that meets your needs and budget - paying in full being just one of them.
Research the Type of Car Before Buying
Sport cars and high performance vehicles, in general, tend to be more expensive to repair when something goes wrong. This is probably the main reason why they are more expensive to insure.
They can be very thrilling to drive, but you should take into account that these cars will depreciate faster than regular vehicles.
There are many affordable and reliable options available on the market today that tend to be cheaper to insure. Older model cars, for example, can often be found at a fraction of the price of newer vehicles. There are also many reliable makes and models that come low repair costs. It is important to consider the insurance cost before buying the vehicle.
Young Drivers Pay More
According to the Insurance Institute for Highway Safety, driver's insurance premiums are higher for teenagers than they are for older driver's. The reason young drivers pay more is due to driver inexperience.
Teenagers have three times the risk of getting in an accident when compared with ten-year old driver, and six times more likely to get involved in a car accident than a driver between 20-24 years old.
Since teenagers often have accidents that costs thousands of dollars, this translates into higher rates of auto insurance. Another consideration is that if parents add their teenager driver on their policy, the rates will decrease. It usually makes sense to add your teenager driver onto your policy because it can be much cheaper than insuring them as separate unit.
Bundle You Policy
When it comes to auto insurance, bundling your policy with home or renters insurance can lead to additional savings. This is because insurers often offer discounts when multiple policies are written for a single customer.
There are a few things to keep in mind when bundling your policies, however. First, make sure that the coverages on each policy are comparable to what you have now. You don't want to be underinsured in the event of a claim. Second, make sure that you're comfortable with the level of customer service you'll receive from both insurers. Finally, check to see if there are any administrative fees for bundling policies.
If you decide to bundle your auto and homeowners policies, be sure to shop around for the best deal. Rates will vary between companies.
Maintain a Good Credit
Drivers with good credit are commonly known to get better deals on their car insurance premiums. Claims history shows that those drivers are involved in fewer accidents, thus getting favorable auto insurance rates.
Drivers with better credit are more reliable when it comes to monthly payments.
Raise Your Deductible to Save on Auto Insurance
One way that many people do this is by raising their deductible, which often saves them money in the long run because it reduces their monthly premiums. How much you will save depends on several factors including your age, driving history, type of car driven and what kind of coverage you currently have.
Some drivers increase their deductible to $1,000 in order to save money on insurance premiums. Understand that you must first pay the higher deductible out of pocket after an accident.
Reason why insurance rates are higher
Auto insurance rates are higher because more people are getting into accidents, the average time for repairs is longer, and the severity of accidents has increased.
According to the Insurance Institute for Highway Safety, there were 33,244 fatal motor vehicle crashes in the US in 2019 in which 36,096 deaths occurred.
With higher cost to the insurance carriers, that cost is passed down to drivers.
Also Read: How to Choose the Right Auto Insurance Policy