Save on car insurance

How to save on car insurance

Car insurance is expensive. But there are a few ways you can save on car insurance by changing your bill paying habits and checking out some discounts. Here are six ways you can reduce your car insurance bill.

1) Don’t pay car insurance in installments– Save $60 per year

We know it’s hard to come up with the full car insurance premium when the bill arrives. Car insurance companies know that too, so they make it easy for you to pay the premium in installments. But they’re not offering “easy” installment payments to be kind. Car insurance charge extra for that service. You’ll pay 12% to 20% more for your insurance if you pay the car insurance premium in multiple installments. If you can sock away extra money each month and get into the habit of paying the car insurance bill in full you can save about $60 per year.

2) Take advantage of “pay early” discounts

Some car insurance companies offer a “pay-early” discount if you pay the entire invoice within 10-days, instead of waiting until the due date. The discount varies by insurance company, but it can be as much as 10%. If your car insurance company offers this type of car insurance discount, it pays to juggle your bill paying schedule to pay your car insurance premium first.

3) Pay on time

Paying your car insurance premium late can cost you a late fee and hurt your credit rating, but letting your insurance lapse costs even more. Car insurance companies charge almost 20% more to reinstate a lapsed policy; if they decide to reinstate you at all (they don’t have to). Plus, they’ll charge that higher premium for several years. So a single lapse can easily cost an extra $1,000 over the years.

If you’re nearing the payment deadline and suspect your check won’t arrive at the insurance company by the due date or the last day of the grace period, contact your agent and ask if you can drop the payment at their office. If the office won’t accept payments and you can’t pay online by credit card, mail the check by Express Mail from the U.S. Post Office. Sure, Express Mail costs $20, but that’s a lot less than the cost of a lapse.

4) Shop early to save money

Every car owner should get new car insurance quotes from several companies every three years. But don’t wait until the last minute to do it. Last-minute shopping (less than 10-days before your current policy expires) raises a red flag to insurance companies. They view last minute shoppers as financially irresponsible and desperate, so they quote a higher price. But they also reward early shoppers (at least 30-days before your renewal date) with lower rates. You can save almost $50 just by shopping early.

5) Reevaluate your coverage

Have you changed jobs since the last renewal? Is the new job closer to home? If so, contact your insurance agent and let them know you’re putting on fewer commuting miles now. That’ll lower your rates.

If you have a child on your policy and they’re away at school with no car, ask for a discount.

And, if your vehicle is older than 10-years and is in fair-to-poor condition, you can save money by dropping some coverage. Check your vehicle’s current value online at nada.com, kbb.com, or Edmunds.com. Then talk to your agent to see if it makes sense to discontinue collision and comprehensive coverage.

6) Track your tickets

Insurance companies routinely check your driving record and raise your rates at your next renewal if you receive a moving violation. But they’re not always so quick to remove the extra charges once the ticket falls off your record. If you track the dates of your tickets, you can call your agent and ask for a reduction as soon as the ticket is removed. Check the status of your driving record

Avoid these insurance mistakes:

Don’t reduce your liability coverage in an effort to save money. You risk your home, savings, and a garnishment on future earnings if you injure someone and you’re underinsured.

You can settle fender-bender accidents on your own, but you still have to report the accident to your insurance company. Since you’re paying out of pocket, they won’t increase your rates. However, if you don’t report the accident and the other person files a claim later on, your company can deny coverage.

Check out the fine print of policies that promise “accident forgiveness.” That feature sounds good, but you’ll probably pay more upfront or face a huge premium increase if you get into a second accident or receive a moving violation.

Finally, ask for car insurance discounts. Search for the following types of discounts:

Car insurance discounts for teachers

Car insurance discounts for nurses

Car insurance discounts for recent college graduates

Car insurance discounts for disabled persons

Car insurance discounts for state employees

Car insurance discounts for government employee

Car insurance discounts for new drivers

Car insurance discounts for good grades

©, 2015 Rick Muscoplat