Top 5 Tips to Save Money on Your Car Insurance

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When it comes to your family’s finances, auto insurance premiums often represent a significant portion of your expenses. Doing everything you can to reduce your premium rates makes good financial sense. However, not all ways are created equal. For instance, letting your policy lapse is a terrible idea. All states except Mississippi, New Hampshire, and Virginia require you to carry minimum auto insurance in order to drive legally. There are a number of better and far less risky ways to save money on your auto insurance. Here are the top 5 tips.

1. Shop Around

Check your policy to see what coverages you have. Comparison shop to see if other auto insurance companies offer the same coverages at a lesser price. But before switching companies, call your current company, tell them you’ve found a better deal, and ask if they’ll match the other company’s rates.

2. Get the Discounts You’re Entitled To

Most insurance companies offer several kinds of discounts. Tell your insurer about your car’s safety equipment like automatic seat belts, driver and passenger side airbags, anti-lock braking system (ABS), anti-theft device, etc., and ask how many of these entitle you to a discount.

Tell your insurer about each driver’s clean driving record. If none of you has ever been convicted of a traffic violation, you and your family have earned the right to discounts because of your sterling driving records.

If your teenage drivers have taken driver education courses and/or are on the honor roll at school, they’ve earned your family additional discounts. If you and/or your spouse is 50 years old or older, most insurance companies offer senior discounts. They often offer an additional discount for older drivers who take a state-approved defensive driving course geared toward seniors.

If you currently have your life insurance, homeowners insurance, and auto insurance with different companies, consider having a single company provide all your insurance. Such bundling generally results in premium discounts for each of your policies.

Consider paying your premiums annually or semiannually. Monthly payments are the most expensive payment method. And however you pay premiums, be sure to pay them on time. Consistent on-time payments often entitle you to a discount.

3. Be Judicious About Filing Claims

The more claims you make, the higher your insurance premiums will be. Naturally, you need to call your insurer if you are in an accident that results in serious injury or death, but think twice before filing a claim for such things as a cracked windshield or other minor accident damage. Property damage claims for less than $1,000 can raise your rates by as much as 18 percent.

4. Add New Drivers to Your Policy Immediately

Insurers are entitled to know who they’re insuring. Don’t neglect to contact your company right away whenever you allow a new person to start driving your car. For instance, if you live in the Raleigh, NC, area, call your local insurance agent as soon as your teenager becomes licensed to drive.

5. Avoid Reckless Decisions

Just because you’re a good person doesn’t mean you need to be recklessly kind. For your own protection, never do any of the following:

• Sell your car to someone but continue to pay for its insurance
• Let your child take your car when he or she moves away from home
• Lend your car to a friend except in a dire emergency, and then only for a very short period
• Use your car for delivery purposes

If your car is damaged for whatever reason, you may sell damaged car today.

Always tell your insurance company when you buy or sell a car. You may get a new car discount and your old car needs to come off your policy as soon as possible. Keeping your insurance rates in check is one of the best things you can do for your family’s finances.