Your car insurance costs may be on the rise with several factors possibly contributing to that increase. For example, a new driver, a different car or a change in coverage can send your rates soaring. Just the same, you can save money on auto insurance by implementing the following money-wise strategies immediately.
1. Review Your Credit Reports
Every consumer shopping for car or homeowners insurance is assigned an insurance score. That three-digit score is based on certain credit report characteristics and is used to measure risk, not creditworthiness. Just as you can retrieve your credit score, you can obtain your insurance score.
Because both your insurance score and your credit score are based on your credit reports, you should review all three of your consumer credit reports to determine if there are problems listed that may contribute to a lower score. For instance, late credit card payments, high outstanding balances on certain loans and a checkered credit history can impact both scores.
Free copies of your credit reports are available through . Review your reports for accuracy and work on building a better credit history. Gradually, your insurance score will rise thereby lowering your auto insurance rate.
2. Review Your Insurance Coverage
How much insurance do you have? How much insurance coverage do you need? If you have not reviewed your auto insurance policy in some time, do so before it is set to renew.
You can save money on car insurance by assuming greater risk. Instead of a $200 deductible for comprehensive coverage, consider $500. Collision coverage is ideal for most cars that are less than 10 years old, while dropping collision coverage for high mileage older vehicles can save you money.
New drivers on your policy will cause your insurance rates to spike. Encourage your teens to maintain good grades as insurers offer discounts for students that have at least a “B” average.
3. Qualify For Discounts
Insurers regularly offer discounts to consumers in a bid to attract and retain their business. You may qualify for discounts in several areas, immediately reducing your auto insurance premium by at least 10 percent.
Consumers who use the same insurer for their cars and home will receive a discount for bundled insurance. Contact your insurance agent to inquire about available discounts including safe driver, anti-theft device and for completing a defensive driving course. Affinity discounts are available if you belong to certain associations or organizations, such as a credit union.
4. Improve Your Driving Record
Points on your driving record can send your car insurance rates soaring. Employing safe driving habits can gradually lower your rates with your record typically cleared of all of its infractions within three years.
You can speed up the point reduction by completing a department of motor vehicles approved safe driving course. Visit your state’s DMV site to learn what courses are available. Typically, if you successfully complete a state-recognized driver safety course, the DMV will shave as many as three or four points off your driving record, lowering your car insurance premium.
5. Consider Your Future Car Purchases Wisely
Your heart says, “sports car” but your head says “family sedan.”
Although there is nothing wrong with following your heart, your head may insist that you save money. This is where your choice in vehicle matters and will affect your insurance rates.
But before you buy any car, make a call to your insurance agent to receive an insurance quote. You can also find out which vehicles will cost you less by visiting the Insurance Institute for Highway Safety’s website to retrieve the crash test ratings for today’s new cars.
The is funded by the major insurance companies and your rates are based in part on how well a car holds up in a crash. Choose a model with a “top safety pick+” rating and your insurance agent will offer a correspondingly lower rate quote than a vehicle that isn’t rated as high.
Other Underwriting Factors
Each auto insurance company has its own insurance rating system, but there are general guidelines these companies follow that make it possible to compare coverage. Other factors that can affect your insurance rates include where you live, your gender and age, your marital status and the number of miles you drive annually.
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