Personal Financial Planning Special Report
Written by Nathan Forsythe
After initially buying an auto insurance policy, it becomes just another bill to pay. Special good driver, multi-car, and miles-driven discounts can help you significantly save on your auto insurance, and don’t rely on your insurance agent to point these out to you. Do an annual review of your insurance and learn about available money-savings opportunities.
Car Matters
The type of car you purchase determines to a large degree the amount of insurance you’ll pay. Most people shop for a car first and obtain insurance later. While shopping for a new car, check the insurance prices for makes and models before you hit the car lots. The least expensive cars to insure include minivans and mid-priced SUVs, notes Forbes, and cars with the best safety records tend to be the cheapest to insure.
Bundled Deals
Most companies offer discounts for having multiple cars on one policy. State Farm notes that you can save up to 20 percent for having more than one car insured with them. As an incentive, insurance companies give discounts for having homeowner, renter and life insurance with them along with your auto insurance. State Farm gives up to a 17 percent discount for these bundled deals.
Drive Less, Save More
The Kelley Blue Book says that insurance companies provide discounts for low-mileage drivers because you spend less time on the road. If you’re not on the road, you can’t be in an accident. Monitor your driving habits over a month and calculate how many miles you drive each year. Many insurance companies use the 1,000 miles a month figure as a baseline. If you drive much less than that, you probably qualify for a low-miles discount. People who carpool to work or ride a bicycle drive considerably less than that.
Safe Driving Pays
The safe driver discount rewards drivers with an accident-free background. Insurance companies may look at who was the driver of the car at fault, whereas other companies account for any car accident you may have been in. Understand how your insurance company interprets this discount.
Have you ever thought about taking a defensive driving course? These courses fine-tune your driving skills so you can handle various situations and minimize the risk of an accident. Since this course is designed to prevent an accident, insurance companies see you as less of a driving hazard. Also, if you have drivers in your household under 25 years old, enroll them in a State Farm special course to help improve their driving skills. Once they pass the course, you get an additional discount on your policy.
Pay More to Save
Increasing your deductible saves you on collision and comprehensive coverage. If you are a safe driver with a low risk of being in an accident, this will rarely cause a hardship. You’ll pay more if your car gets damaged in an accident, but you will have saved on your monthly premiums.
Safety Features
Identify features on a car that prevent it from being stolen or minimize damage to the car and occupants during an accident. Features include:
- Car alarm systems
- Automatic seatbelts
- Anti-lock brakes
- Special lights (e.g. running lights)
If you’re in the market for a new car, compare the cost of these features with what you might save on insurance premiums. Don’t hesitate to ask your agent direct questions about special deals that will save you money.