- 1 How can you lower your car insurance premium?
- 1.1 Types of Coverage for Car Insurance
- 1.2 5 Ways to Lower Your Car Insurance Premiums
How can you lower your car insurance premium?
In most of the US States it is mandatory that you get your car insurance at least with minimum coverage. It is always advisable that you get your car insured with optimum coverage for the state you are living in. You have to decide on what deductible you want to go for and what coverage you want to include in your insurance. Insurance companies provide different kinds of discounts and promotional offers to attract new customers. Before going on fact about how to lower car insurance premiums; let’s we check some basic details.
If you are to purchase insurance for your car, you choose trusted insurer in the first place. Considering factors such as your income, home budget, credit available with you and the area you are living in, you can decide on deductible and coverage you would like to choose.
Types of Coverage for Car Insurance
There are various types of coverage offered for car insurance and to know about what coverage can be overwhelming. Following given are some of the tips and guidelines about types of coverage.
1. Liability Insurance Coverage
Liability insurance covers you if an accident occurs to your car and you are responsible for it. It will cover the cost of repairing any property damaged by the accident and medical expenses resulting from injuries. Most states require that drivers must have minium liability insurance coverage. It is always recommended that you have liability insurance as it protects you if you are at fault for an accident.
2. Collision Coverage
Collision coverage provides cost for the repairs to your car in case of an accident. If your vehicle is at total loss, you will be paid for the value of your car. If you have an expensive car or a new car, it is better to get collision coverage. If you have old car, you can do without it. It is mandatory to have collision coverage, if you have a lien holder.
3. Comprehensive Coverage
Comprehensive coverage offers protection if loss happens to your car due to hazards such as theft, fire, storm, vandalism, flood, earthquake etc. It is good to have comprehensive coverage if it fits your budget, otherwise you can do without. If you have a lien holder, you have to get comprehensive coverage.
4. Personal Injury Protection
Personal injury protection (PIP) pays for medical expenses to you as well as other passengers in the vehicle irrespective of who is at the fault in an accident. It is always recommended you go for PIP coverage. PIP is not offered in all the states.
5. Uninsured /Underinsured Motorist Protection
It may happen that the driver of the car you are driving in is not insured or has very less coverage for you to get covered in case of an accident. Uninsured or underinsured motorist protection helps you with the expenses in such cases. It is usually less expensive to add uninsured/underinsured motorist protection.
If you want to know how can you lower your car insurance premium, then let’s come on the point.
5 Ways to Lower Your Car Insurance Premiums
For choosing the most beneficial and affordable car insurance, you have to consider several things to ensure that you get the best possible insurance coverage and premium on the car insurance. Following discussed are the ways to help you reduce your car insurance premium.
1. Drop Unnecessary Coverage
If you have insurance policy for several years, it is time for you to review your policy. When your car was new, it was good to have comprehensive coverage, but for old one you can drop it. If resale value of your is also very less, you can do without collision coverage provided you don’t have agreed-price coverage. It may happen that the premium you pay for the coverage may be more than the benefit you will get for the current value of the car if an accident occurs. Some credit cards provide roadside assistance similar to the one you get from your insurance company, and if you are offered any such benefit, then you can also avoid roadside assistance coverage.
2. Review Your Deductibles
The more deductible you choose, less is the insurance premiums you will have to pay. If you have a long record of safe driving and you live in an area which is less accident prone, you can lower your insurance premium by raising your deductible. You can put the money saved on premium in an interest earning account and the accumulated amount can be used for car repair if need arises.
3. Get a New Car
The premium you will pay for your car insurance is mainly determined by the car you have. You have to pay highest premiums if you own sports cars or performance vehicles, whereas family mini-vans and small car insurance are comparatively less. You will have to pay fewer premiums for a cheaper car. Which car is the cheapest to insure varies from state to state. You get maximum benefits for your money is of prime concern.
4. Buy a Home
Most of the insurance provider companies offer great discount if you own a house and have got it insured from the same company. If you have bought a new house, you make sure that you inform the insurer about it before you renew your car insurance or get new car insurance. It can save you lot of money. You also get discount on multi vehicle policy.
5. Raise Your Credit Score
You might find it unbelievable but it is true that good credit score can lower your insurance premiums. The fact is that people with lower scores have more accidents in comparison to those with higher credit scores. In some of the states such as Massachusetts, Hawaii, or California, your credit score doesn’t matter as in these states insurers are not allowed to consider your credit score to decide your premiums. You can increase your credit score by making optimum use of credit cards to make payments and then paying your monthly credit bill on time.
Follow the guidelines on how you can reduce your premium and derive maximum benefit and coverage for you car insurance.