Car Owner’s Guide: How To Get The Cheapest Car Insurance Rates

Category: Insurance

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11 min read

It’s quite unfortunate that insurance companies don’t hold black Friday sales for you to maximize your car cover! But with some bit of finessing, you can get yourself a great cover without breaking an arm and a leg.

Before we jump right in, here’s a video explaining what car insurance is:

Types of Car Insurance Covers

The multiple versions auto insurance comes in to make it complicated in addition to the lack of clarity in what each type entails and how they work. Motorists are expected to have auto cover, but very few understand how the different options function. So let’s divulge what these coverage policies are:

Liability

This type of insurance only pays out to the other party if you’re the one in the wrong. Depending on the policy you get, you’ll be faced with two options: physical disability liability and liability for loss of possessions. If you’re the cause of the accident, your insurance pays out to the other motorist.

In physical disability liability insurance, your cover incorporates the other motorist’s hospital invoice. With the loss of possessions liability, the other person’s car or damaged property are taken care of.

Liability insurance appears on your disclosure document as a set of three digits, e.g., 25/50/10 cover. This means that about 25k will be paid out if one person is injured, 50k where there are multiple injuries, and 10k where someone’s possessions are damaged.

Personal Casualty Security and Hospital Bills

Personal injury protection (PIP) may be purchased as either a mandatory coverage required by the law based on where you stay or as part of health insurance. Unlike health insurance, PIP gives a comprehensive cover, including non-medical bills, for you and any other rider in your car, even if you’re the one in the wrong.

Uninsured/Underinsured Driver

More often than not, you’ll be expected to have this insurance as this includes health bills and car injury for both parties, even if you’re the victim. An example is a hit-and-run where the perpetrator isn’t caught, or if the driver at fault doesn’t have enough insurance to cover your damages, then the underinsured motorist insurance kicks in.

Crash Coverage

This insurance pays out if you’re responsible for the accident that results in injuries to your vehicle. The incident needs to include a mobile car crashing into another object, be it another car or standing structure. If there’s an accident where your vehicle slides back on a steep slope, collision coverage will pay out.

Comprehensive

This all-inclusive insurance funds a variety of car injuries that don’t count as collisions. These range from storms, tidal surges, cyclones, crashing into animals, break-ins, wreckage, or if something falls on your car.

Windshield smashing also falls under this cover, and some insurers even go the extra mile to provide an independent screen cover. This gives you access to screen replacements outside of making all-inclusive deductibles payments.

Roadside Support

Though not compulsory, this is a recommendable cover to get, and it’s cheap so you won’t have to worry about extra costs. How roadway assistance works is that, if your vehicle malfunction while you’re driving, you can call your insurer and they send help to ferry you to the nearest garage.

For example, if your car ran out of fuel, or the engine fails, and you need a jump start, or you’re unable to get into your vehicle, then road assistance kicks in.

Lease Refunds

If your vehicle suddenly stops moving, you’ll need to have a plan B for a means of transportation. In most cases, companies lease out cars to drivers whose only vehicle is off the road, and your cover may incorporate such fees. For the length of your vehicle repair, depending on your agreement, your insurer will cover a part of the expense incurred.

Check with your insurance company first if there are limits to this since it’s a case by case cover. If it’s not sufficiently covered, you may need to add it on as a separate policy.

Gap Insurance

If your debt is above the value of your car, then gap cover makes up for the disparity between the two if you need to make for complete wreckage. This is available from the merchant you buy your car from, as well as the insurance company you’re with. Weigh out your options before settling for a service provider since prices may vary from firm to firm.

10 Tips to Get the Cheapest Car Insurance Rates

No one wants to pay for more than they have to for auto insurance if they can help it. So you’ll be glad to know that there are ways to cut those costs and get yourself the best deal.

Insurers are in the business of using big terms and tempting offers to get you to sign with them, and few people ever scrutinize their policies to try and negotiate.

For those who are ready to take matters into their own hands, here are some tips to help you come out with the lowest costs available:

1. Compare Different Insurance Providers

Before making a decision, get quotes from as many insurance carriers as you can, this helps put into perspective what you’ll be signing up for with each offer. You can look up online rates from virtual insurance agents or approach nonpartisan firms to negotiate the best deal.
Endorsements from relatives and friends about honest experiences with specific companies will also help eliminate choices.

2. Get Package Covers

If you can find an insurer to cover more than one of your needs, you’re sure to get a great bargain. For example, if the company you get your umbrella policy offers good car insurance, consider grouping the two.

3. Bargain for Discounts

Auto insurers provide expansive selections of deductions based on your car’s accessories and good relations with their customers. Wherever any of their discounts are relevant to you, petition for them and make sure they appear on your invoice.

4. Reconsider Your Comprehensive and Collision Coverage

Drivers are expected to have a margin liability cover, which insures you against any casualty inflicted on another motorist. According to Consumer Reports, motorists should exceed the minimum fees and get sufficient covers that protect the individual, accident, and property damage.

Collision cover protects your vehicle if you crash into another car, and comprehensive cover shelters you from non-crash related damages. If you can revoke your C&C protection, you’ll save more money, especially if the yearly costs add up to more than 10 percent of your vehicle’s book worth.

5. Increase Your Deductible

If all you have is a liability cover, there won’t be any deductibles since insure damages inflicted on other people. Deductibles are payouts you make before your insurance company covers you, and the higher the amount you pay, the smaller your premiums. However, if you opt for more significant deductibles to maximize premiums, keep the amount in your savings book to file records in case you need to make a C&C suit.

6. Take Pay-Per-Mile Insurance Into Account

If you’re a good driver and your odometer isn’t too high, you could opt for PPM or telematics insurance and save money! The insurer will install a tracking device to monitor the distance your vehicle travels annually, and below an agreed mileage, your premiums drop. Take note, however, that the tracker also alerts the insurance company of any recklessness on the road like speeding or skidding.

7. Maintain a Perfect Driving Record

Safe driving gets awarded! In this way, you can earn yourself some deductions and get the cheapest rates possible. The different firms you’ll look at will have varying terms that count as commendable driving, and basic things like having tickets or violations or accidents ruin your chances.

Your records are inspected at up to a decade of your driving history while speeding tickets appear for up to five years, and DUIs last a whole decade. Gizmodo highlights how companies track drivers’ skills to evaluate potential customers.

8. Work on Your Credit Rating

Your credit affects your coverage rates since most insurers look at your credit score when doing an audit. The kind used in insurance tells the insurer how much of a risk you are before setting your premiums.

Things like delayed payments or inability to pay and the types of credit impact your insurance rates. See what Business Insider says about your credit score here.

9. Pay Your Bills On Time

Insurance companies sometimes tax you a fee for every payment made if it’s not set to deduct from your bank automatically and to push you to settle your full bill at once. With every delayed payment, you endanger your coverage as you may get cut off and charged with a fee for defaulting payment.

10. Terminate Insurance for Idle Vehicles

There’s no need to continue with payments for cars that aren’t on the road. If the vehicle isn’t going to be moving for even a month, briefly defer payment if your insurer has that option. This does, however, increase your premiums once you resume your cover. My advice is that if the car isn’t mobile for a while, hold off paying it’s insurance except for the comprehensive coverage lest your vehicle gets hijacked.

What Influences Auto Insurance Costs 

Car insurance rates differ depending on the insurer as well as the individual buying the insurance, even if two people are registered with the same insurance firm. Forbes talks about how specific factors that pertain to you as an individual will determine how much you pay.

Your Preferred Policies

Policy premiums give you some level of authority over the price you pay for your cover. If you comply with your area’s terms and prerequisites, you may cap your policy and modify the different covers you have.

Policy Restrictions

The higher the cover you get, the larger your total bill will amount to. Most times, people may be tempted to opt for the regional marginal insurance with few policies and a cheaper rate. However, you don’t want to compromise your cover and leave yourself exposed if an accident happens, and you don’t have enough coverage.

Though certain policies may appear appealing, if an accident happens and you have to pay separate hospital bills, the costs can add up fast.

Type of Cover

Things like all-inclusive and crash insurance are usually available as a choice, but some car rental services may ask you to present such covers if you’re borrowing their vehicles. If you’re getting it as an additional cover, shop around for different rates first to give yourself a better chance at making a bargain that benefits you.

However, if you choose to go without it, then bear in mind that if an accident occurs, you may end up paying more than the comprehensive cover would have cost you.

Deductibles

Deductibles are fees that you cover from your funds once you’ve made a claim and are waiting for your insurer to pay out. The bigger the deductibles you have, the smaller the coverage premium. All the various policies you have will have varying deductibles.

Rating Factors

Insurers use analytical information they gather to decide if you’re a hazardous driver and could potentially be a liability to their company. Different drivers, based on their “potential peril,” may be charged different rates.

How Old You Are

Your age plays a crucial role in your driving, and so it’s a big consideration insurance companies take when charging their customers. Teenagers and new drivers are considered the most potentially reckless, and so have the highest rates.

As you get more experience, your total charges reduce, and only increase once you become a senior citizen. Retirees may have rates as high as new drivers because of limited physical abilities at that age.

The Car You Drive

If you have an expensive, flashy car, then expect your coverage rates to be substantial. A driver getting insurance for a Porsche, a luxury racing car will be charged much more than one with a pickup truck.

Your Driving History

Any speeding tickets or traffic violations label you as a risky driver, so your insurer will charge you more.

First Claim

If this isn’t your first auto claim, then your insurer will look into the nature of your application history, and your charges may be more as a result. The more times your name appears, the higher your costs.

Your location

The region you’re in affects the rate you’ll be charged. For example, if your insurer notes that you’re from an area rife with crime or prone to disasters, you’ll pay more.

Credit Ratings

Usually, the higher your credit rating, the more responsible you seem, and so your rates are lower.

Discounts Available to You

Ask your insurer if you qualify for any deductions. Things like bulk policy covers and customer loyalty may work in your favor and get you a concession. If you’ve never made a claim, you may also be awarded a discount.

Wrapping up!

Once you’re armed with sufficient knowledge, getting auto insurance for your car shouldn’t be as much of a hassle. Ask the right questions and bargain the best price for you since insurance companies are in the business of making money and won’t always bring up ways that could save you a few bucks.

Do a regular inspection to ensure that your policy still meets all your needs.

Enjoyed reading out tips to getting the lowest auto insurance rates possible? Well we’ve got more for you! Check out our other articles on insurance below:

Comment and let us know what insurance-related topics you want to see us cover in the future!

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