10 Hacks To Save On Car Insurance
Car insurance is weird. It’s one of the few consumer products that is legally required, and at the same time, is constantly subject to change. This means that insurance premiums are always fluctuating and if you do not regularly check your rates, you could be consistently wasting money. Spending as little as 30 minutes checking rates every couple of months and comparing quotes could save your hundreds of dollars a year or more.
Here are a few tips to help you save on car insurance and stop wasting money.
Check Your Coverages
Many people don’t spend a lot of time checking what their actual coverages are or what they mean. In some situations, when we get a new car or transfer companies, we just grab whatever coverage is required by law, required from loan companies or are recommended by the insurance company.
For example, if you initially purchased a vehicle that had a loan, you were required to carry both comprehensive and collision coverage. These coverages cover the physical damages to your car or in other cases theft (comprehensive.) Banks require this coverage in order to protect their loans. Once your car is paid off, you are no longer required by the bank to carry these coverages. If your car has depreciated enough in value, it may not be financially worth it to you to carry comprehensive and collision.
If you car, after depreciation, is only worth $3000, and you’re paying $200 a month for comprehensive and collision, over time the amount you pay for your damage and theft coverages will outweigh the value of the car. In that case, many consumers choose to drop the coverage and save on their monthly premiums. This is of course, a personal decision for each consumer.
Additionally, check your liability coverages. Trying different levels of liability coverage can lower or raise your premium depending on how much risk you want to take.
For example, all states have a minimum liability. This ranges from state to state, but generally, the lower your liability coverage, the lower your premiums. The trade off with this of course, is the lower your liability, the more risk you take.
So if you have the minimum liability coverage and you end up crashing into a Lamborghini, you may not have enough insurance to cover the damages and may be forced to pay money out of your own pocket for the other party to repair their car. Although this is most likely a rare situation, it could still happen.
So once again, changing coverages is always a personal choice of how much risk you want to take and often directly relates to how much your monthly premium will cost.
Look For discounts & Compare Rates
It’s important to always compare your insurance. If just once a quarter you do a rate comparison between the major insurance companies, you can regularly find savings. Companies change their actuary processes on a regular basis, which means that the rate they gave you in the past could be different than the present rate just based on their own internal company changes. Also, over time you may fall into different categories with different companies that can promote savings.
Check with your insurance company, or competitors, to see if they offer and discounts that apply for you. Many companies offer discounts for military service, good driving history, defensive driving classes, garaging your vehicle and more.
Also, there are new companies that offer discounts based on technology. One of these companies is called Root. You download an app on your phone and let it track how you drive for a period of time. If Root determines your driving behaviors are safe, they can award you discounts or lower rates on your insurance. Simply download the app on your phone, fill out the profile, start using the app and see if you can save some bucks.
You can download the Root app and see if you can save on car insurance by visiting their website.