Ways to Save Money on Car Insurance (continued)
Cut Your Auto Insurance Premiums in Half by Raising Your Credit Score. Who do you think pays more for auto insurance -- someone with a good credit score, but several traffic tickets and accidents, or someone with a perfect driving record but a low credit score? Surprisingly, it is often the person with the low credit score and the perfect driving record. Why? Because most insurance companies have conducted research that tells them those with low credit scores are three times more likely to file an insurance claim than those with good credit scores. As a result, they often charge those with low credit scores a premium that is two to three times higher than the average. Many consumer groups find this practice unfair and some states have banned it or limit the use of credit scores in determining insurance rates. Raise your credit score and you will save significantly on your auto insurance.
Be a Safe Driver. If drivers knew how much just one speeding ticket increased their insurance premiums, they wouldn't speed at all because just one speeding ticket can increase your car insurance premiums by about 25 percent. Two speeding tickets or a speeding ticket and any other traffic infraction can increase your premiums 40 percent. Three speeding tickets will increase your premium 65 percent and four speeding tickets will make it very unlikely you can get car insurance without paying 100 percent more than a safe driver. A teenager with just one traffic conviction can pay two or three times more in insurance premiums. This is why when you receive a traffic ticket you should always contest it no matter what. Perhaps you'll get lucky and the judge will dismiss the ticket or reduce the charges or perhaps the officer who wrote the ticket won't show up at the hearing and you can surely get it dismissed. Insurers regularly check for speeding tickets and other traffic violations once every 12 to 18 months. Tickets and accidents can remain on your record for three to five years, so ask for a lower rate if you’ve been a good driver the last three years.
Find Lower Rates for Bad Drivers. Typically, the more tickets you have and the more accidents you have been involved in, the higher your car insurance rates. But you can save money by getting insurance quotes from small independent insurers who are trying to compete with the major insurance companies.
Don’t Buy a High-Loss Vehicle. Insurance companies keep track of how much it costs to repair every type of vehicle there is and which vehicles are most likely to result in injury or death to the occupants, and which cars are most likely to be stolen. These are just three factors that go into determining your insurance premiums, and if you own a high-loss vehicle, you will pay more for car insurance. Ask your insurer for premium quotes for different car models and research the Highway Loss Data Institute website online to find information about costs associated with every car model there is or you can conduct this research at InsWeb.com
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Have $100,000 in bodily injury coverage. Most car insurance policies only come with $10,000 in bodily injury coverage, yet the average medical costs associated with an automobile accident injury are over $20,000 per person. If you are responsible for injuring someone in an auto accident, you could be held liable for all medical bills over $10,000 that your auto insurance policy don't cover.
Get the $100,000 bodily injury coverage with your car insurance policy, even if you have to pay more in insurance premiums, because it would be penny wise and pound foolish to leave yourself vulnerable to an expensive lawsuit just to save a little money on car insurance.
Let your insurance company track you. Some insurance companies, such as Progressive, will give you a 10 to 15 percent discount if you let them track your driving habits for six months by plugging a tracking device in to the car’s diagnostic port. The device will record how many hours you drive per day and how many times you brake suddenly as if to avoid an accident and send the data to the insurance company. If the data indicates you drive less than the average person and don’t use the brake too often, you could save as much as 30 percent.
Lower your teenager’s car insurance. Teen drivers can raise a family’s annual car insurance premiums significantly, usually at least 50 percent higher. There are discounts available for teens who are good drivers and who have parents who are good drivers. There are also discounts of up to 15 percent for students who make good grades. Be sure to change your coverage when your teen goes off to college if they aren’t driving your car anymore or you are no longer financially responsible for them.
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