The 6 Most Important Steps to Solving High Car Premiums

May 29, 2021 | Personal Insurance

Having a car makes a lot of things easier. You wouldn’t have to go through the trouble of calling an Uber every time you plan to go out. What makes it more convenient is when you go to work. You can make the most out of your time because you don’t have to worry about whom you’re hitching a ride with. By sitting in the driver’s seat, you’re good to go!

What makes people frown, however, are the high expenses related to their vehicles. They have to spend money on the car’s maintenance. Another expense that likely hurts their pockets most is car insurance. It can get expensive due to some reasons. You shouldn’t worry though! In this read, you can find out about the 6 most important steps to solving high premiums.

Do you need Car Insurance?

Every driver knows the answer. Yes, you need car insurance. There are two reasons for this. One, your state requires it. Almost all states mandate that their drivers have a minimum amount of insurance. Two, it is one of the best investments that you can spend your money on because it protects you. It can protect you financially, legally, and emotionally. 

If you have car insurance, then it’s possible for you to not bear all the penalties and payments that need to be made. This situation is particularly handled by liability coverage. There are other types of coverage that you may include in your policy. It varies from collision coverage, comprehensive coverage, personal injury protection, and many more.

One thing is for sure: you need to purchase car insurance. If you are worried about the cost, then let us introduce to you six important steps on how you can solve your high premiums.

6 steps to lower your rates 

This topic is something that people ask about many times. How can I lower my rates? Can I save money on auto insurance? These questions are a few among the many inquiries that people wonder about. Lucky you! There are ways to lower your auto insurance costs. Want to know about them? Keep reading!

Shop around for insurance

In buying auto insurance, you need to choose the company that can provide you with the protection that you’re looking for. Remember that what you’re putting at stake here is your financial protection. If you made the wrong choice, then you might be subjected to serious consequences. That’s why we recommend shopping around first before making the purchase.

Things to consider while looking for the right insurance provider

  • Pricing. Of course, one of the reasons you compare quotes is to find the best deal. Consider comparing at least three quotes from different insurers. After all, if they offer the same thing, then it might be good to go for the lowest-priced offer.
  • Customer feedback. The cost being low doesn’t mean the service is good. You might get blinded by the enticing low prices of several companies out there. When you need help and coverage, you don’t get the service that you paid for. Getting some recommendations from your acquaintances and relatives is a worthwhile task.

Choose the right vehicle

Let’s say that you are driving a flashy car that runs fast. You know a friend who drives a less flashy car. When you asked them about the cost of their policy, you found out that theirs is lower than yours. The reason is your car. The vehicle is, of course, considered when calculating your rates. You have to choose the right vehicle to significantly lower your premium.

Factors that you should consider before you buy a car

  • Safety rating. The safer you are, the less claims you will make. Insurers examine how likely it is that you’ll get into an accident because of the car that you drive. They will also consider the likelihood of your passengers sustaining injuries. If the safety rating is high, then you can expect a lower premium.
  • Vehicle size. A bigger car is safer than a relatively small car. They can provide better protection when it comes to accidents. However, the engine size may also be included in the consideration. If a big engine is placed inside a small frame, then driving such a car will subject you to high rates.
  • Car’s age. As soon as you drive your car, its value depreciates. Its repair costs will be lower too. That’s why compared to new cars, older cars tend to be totaled most of the time. The term totaled refers to total loss, and it happens when the repair costs exceed the actual cash value of the car. 

The cost to replace an old car is less than the cost of replacing a new car. That’s why new cars don’t get totaled often. Newer cars need higher coverages though, so it costs more to insure.

  • Likelihood of theft. There’s also a type of coverage that pays if your car gets stolen. Owning a car that is likely to attract thieves significantly affects your rates. 

Maintain a good record

Keeping a good record is always useful. Do you remember when you’re still going to school? Being a straight-A student has its perks. There are also records that insurance providers check on pricing your policy. These can help them assess your risk and give you the right price that suits your information. 

Driving record

Your driving history includes all the moving violations that you made, as well as the accidents that you’ve been into. These put a red flag in your driving record which signals insurers that you may possess a certain amount of risk. Getting involved in a car accident raises your rates. Take note of this, if you have a horrible record, then some companies may refuse to insure you.

In case you’re not aware, moving violations include speeding, running red lights, driving under influence, and many more. These violations, accidents included, don’t stay permanently in your record. After three years, they become less and less relevant. You can improve your driving record by avoiding the examples above.

Credit record

A credit record reflects how well you pay your settlements and bills. Insurance providers check these in pricing your premiums. Studies show that drivers who have poor credit are more likely to file claims in the future. That’s why they charge higher rates in return. To maintain good credit, it is advisable to:

  • Work and earn money
  • Pay your bills on time
  • Balance your credit well
  • Only get enough credit

Find out about the discounts that you can get

One way to reduce the cost of your insurance is to get discounts from your insurance provider. Just like when shopping at malls, you can save money by buying at stalls with “20% off” signs. In auto insurance, you can also receive discounts if you are eligible for them. Ask your insurer about all the possible discounts that you qualify for. Here are a few examples.

Bundling policies

Many insurance companies offer a reduction in premiums if their customer bundles their policies. Bundling policies happen when you get the two coverage from the same company. The most popular bundle is homeowners and car insurance, through which many people were able to save money.

Telematics

Allowing your insurer to monitor your driving habits and activity can get you qualified for a discount. The monitoring process happens when you install a telematics device that essentially tracks your car and your activity. If you are able to drive safely, then you can get lower premiums. 

If you have heard of pay-per-mile or usage-based insurance, then you might be aware that telematics is involved in them. It can also track your mileage which insurers use in the said type of insurance.

Driving courses

Drivers who have taken driving courses, particularly defensive driving, are eligible for discounts. Taking such courses can signify that you are a safe driver. The less risk you have, the lower your rates will be.

Good student

Getting good grades is useful not only in school but also in insurance. Students who have B-grades and above may receive discounts. Having such grades may imply that you know the dangers of driving and you can use your wits to avoid them. 

Adjust your policy

We’ve discussed earlier that auto insurance might be mandatory in your state. You’ve also learned that there are several types of auto coverage. Now, we will explain one by one the characteristics of each type so you know what you should include in your policy. Remember that everything is up to you. Nonetheless, here’s a quick guide on coverage types.

Liability coverage

Liability coverage pays if you are the one at fault for an accident. It’s required in most states and there’s a minimum amount for it. The minimum required limit in Denver, CO is 25,000 dollars per person for bodily injury. You also need 50,000 dollars of liability per accident for bodily injury. Lastly, you need a minimum of 15,000 dollars per accident for property damage.

Here’s a real-life example for you to understand better. For instance, you hit the rear end of another car. When the other driver went down, you found out that they had some wounds and bruises due to the crash. The rear of the car is also damaged. Liability coverage will kick in here. It will reimburse the other party’s fees. Take note that your expenses will not get paid for by liability insurance.

Collision and comprehensive insurance

If you cause an accident, your liability insurance only pays for the other driver. That means you would have to pay out of your pocket for the repair costs of your vehicle. With collision insurance, you wouldn’t have to worry about that. It pays for car repairs regardless of fault. It’s additional coverage that you may include in your policy.

What if no one’s at fault for the wreck of my car? There are many situations where your car gets damaged but no one is to blame. For example, a tree limb fell on your car or someone broke its windows. The unfortunate thing is you have to repair your car even if you didn’t do anything. Comprehensive coverage handles these kinds of situations. In case someone vandalizes or steals your car, or it’s damaged by falling debris, comprehensive coverage will pay.

Keep in mind that for these two types of coverage to kick in, you have to pay a deductible first. Deductibles are a set amount of money that you share in the costs of repairs. Let’s say that the costs amount to 1000 dollars. You will receive 750 dollars if you have a 250-dollar deductible.

Personal injury protection

One type of coverage that pays for your medical bills is personal injury protection. Also known as no-fault insurance, covers your injuries as well as your passengers’. It will also pay for lost earnings, funeral costs, home care expenses, and others regardless of fault. It might be mandatory in some states, and it’s useful if some of your passengers don’t have health insurance.

Uninsured/underinsured motorist coverage

While driving uninsured is illegal, many drivers who don’t have coverage still brave their way on the road. You’re unfortunate in case such a driver hits you. To protect you from financial problems, getting uninsured/underinsured motorist coverage is the right thing to do. It will pay if someone doesn’t have insurance and is at fault for the accident where you’re the victim. It might pay as well if someone did a hit-and-run on you.

Let’s differentiate the two. Uninsured motorists are drivers who don’t really have insurance –as in none. On the other hand, underinsured motorists have a minimum amount of coverage, but it’s insufficient to cover all the damages. If you have this type of insurance, then you can rest assured that you won’t pay anything that someone inflicted on you.

Drive safely

Without a doubt, driving safely is the most important step in solving high premiums. Consider this: 

  • If you drive safely, you can keep a clean driving record.
  • Insurers will deem you a low-risk driver.
  • You will not receive a surcharge because you won’t make a claim.

These aren’t the only perks of driving safely. You can stay away as well from being physically hurt due to injuries. Avoiding the mental stress brought by your bills can be done too! There are many more advantages, and they may vary depending on how you perceive them.

The takeaway

Auto insurance is the sibling of owning a car. They always come in pairs. If you want to enjoy using your car, then getting insured is needed. The high cost may make you hesitate. Nevertheless, you don’t need to worry since there are ways to reduce it. Speak with an agent from Advantage Insurance Solutions now and start being protected while driving. Call us today!