ather together the crucial information you will need to shop around. Life is not static, and your auto insurance policy should not be either. If you have had a recent life change, such as moving to a new home or switching jobs, it is time to review your policy.
Before you shop, however, check with your current auto insurance carrier to see if you are able to get a better rate from them. For example, many insurance companies offer various discounts to consumers, such as multiple policies (such as car and home), installing an anti-theft device, taking a driver safety course, or even getting good grades at school.
It pays to call your carrier to make sure you are receiving every discount to which you are entitled. Once you have reviewed your policy, understand your current coverage limits, and know they meet your needs, it is helpful to follow a few simple tips for finding the best rates on auto insurance.
First, start with your car. If you are in the market for a new car, remember that comprehensive and collision coverage costs are dependent upon the year, make and model of the car. Typically the more expensive the car, the higher premium you will pay. Rates for comprehensive an collision coverage do not vary a lot between insurance carriers, so if you cannot afford a high rate, consider buying a less expensive model.
Second, one of the easiest ways to lower your auto insurance rate is to take the highest possible deductible you can handle. By selecting a higher deductible (such as $1,000 instead of $250) you will pay a lower up-front premium. However, you will have higher out-of-pocket expenses if you have to file a claim down the road.
Third, check your credit score so you know what you are up against. Most auto insurance carriers use a credit-based score when calculating your premiums. This score is based upon risk and the lower your credit score, the higher premiums you will pay. To improve your rates, make sure you pay your bills on time, monitor your credit score routinely, and take action to fix any negative issues that may be on your report affecting your score.
Fourth, consider changing your coverage, or opting out of some of it all together. If you drive an older vehicle, for example, and it is owned outright, you may look at dropping your comprehensive and collision all together. Depending on the age of the vehicle, it is possible you may be paying more in insurance that what it is worth.
Finally, check into some low-cost options such as “pay as you drive” policies which peg premiums based on the amount of miles you put on your car every year. Some states also offer low-cost auto insurance programs for low-income consumers. States, such as California, Hawaii, and New Jersey offer such programs. Policies under the California Low Cost Automobile Insurance Program, for instance, can cost less than $400 a year to insure your vehicle.