Auto insurance is something we all are required to have as American citizens if we’d like to be behind the wheel. It can seem pretty overwhelming as you try to decide which insurance company can provide you with the lowest possible price. Here are the top 3 tips we’ve organized that will save you money on auto insurance:
1. Understand Auto Insurance
Your auto insurance will be either your best friend or your worst enemy in the incident of an accident. As you decide which company to commit to you should take a step back and understand the entire concept of auto insurance itself. It should be understood that like all insurance, auto insurance rates are assessed based on risk. Auto insurance providers calculate your likelihood of making a claim, therefore basing your premium on the level of that risk.
You should understand that auto insurance providers do not only base your risk on your driving history or experience, but also consider:
- Your credit history (unless your state prohibits this)
- Your occupation
- Your age, gender, and marital status
- Your vehicle’s make, model, year, and color
- How many miles you drive per month or year
By understanding that the price you will pay is determined by these factors as well, you may be able to make decisions such as choosing a car that is considered “less risky” by insurance providers, or even wait until you have restored your credit score.
2. Raise Your Deductible
If you choose to raise your deductible on your car insurance, you will be able to lower your premium costs! The only downside of this is you will need to have enough cash set aside to pay the higher deductible if you do have to file a claim – but let’s hope that day never comes.
3. Bundle Your Insurances Together
Many companies can provide you with a discount if you purchase two or more types of insurance from them. These insurances can include life or homeowners as well as the auto insurance plan in question. This method can only be applied to those who offer it – so make sure to inquire with potential insurance companies to find out if this is something they offer!