Rick's Free Auto Repair Advice

How to save on car insurance

Save on car insurance

It’s a huge expense even if you’re a good driver. But not knowing how to buy car insurance can cost you big time. I’ve listed the top seven ways to save on car insurance.

#1 tip on how to save on car insurance — get the right coverage

I know you want to save money on car insurance, but eliminating comprehensive coverage to save money can actually cost you BIG TIME if someone steals your catalytic converter or steals your vehicle. Your collision coverage will not cover a stolen catalytic converter, only comprehensive coverage will do that. So don’t skimp on this

#2 tip to save on car insurance. Shop early

That’s right, you’ll pay more if you wait until days before your old policy expires. Waiting until the last minute is a red alert for insurance companies. It can be a sign that you’re shopping now because you just got a citation, just had an accident, or that you’re just an irresponsible person. Start shopping for car insurance at least 30-days before your current policy expires. You can always cancel the old policy and get a pro-rated portion of your premium refunded.

#3 tip. Pay quarterly or annually

Insurance companies love to let you pay monthly because they make money on the interest charges. If you have the money, pay your premium annually. That’ll save you a good chunk of change.

#4 tip. Pay promptly

Paying late not only gives you a bad credit rating, it also lowers your insurance score. If you see you’re going to be late, contact your local agent and drive a check over to their office instead of mailing it. Or, send it by overnight USPS Express Mail or even FedX. Paying for overnight will still be cheaper than the late fee or the bump in premiums due to paying late.

#5 Tip  Talk about your auto use

Talk to your agent about your driving. If you’ve changed jobs or retired and don’t drive as many miles, tell your agent. Otherwise, they’ll assume you are an average driver and drive 15,000 miles per year.

#6  Tip. Keep track of your accidents and citations

Car insurance companies are not supposed to upcharge you in perpetuity for accidents and tickets. If you’ve had an accident or citation and it’s been longer than three years since your last one, contact your agent for new rates. Or, call other insurance companies for a fresh quote.

#7 Tip. Avoid filing small claims

The more claims you file, the less attractive you are to an insurance company. Even if your insurance company has an accident forgiveness policy, it doesn’t pay to use it for small claims. Save it for the big claims. If you file a claim for every small accident, don’t be surprised the company doesn’t want to renew you when your current policy expires.

#8 Tip. Re-evaluate your coverage.

You have to have liability coverage, but you don’t have to carry collision on every vehicle. If you have an old vehicle where a single accident will cost more to repair than the vehicle is worth, consider dropping the collision coverage on that vehicle.

Other car insurance tips

Don’t EVER let your car insurance lapse

Even if you have to pay your premium with a credit card, don’t let it lapse. If you do, your insurance company may not allow you to renew, or if they do, they’ll probably increase your premium buy as much as 20% for several more years.

Letting a policy lapse is a red flag that tells your insurance company that you’re irresponsible.

Don’t reduce your liability coverage to save money

Reducing your liability limits is a really bad way to save money. First, it won’t save you much. Second, if you ever get into a serious accident with injuries, you risk losing everything — your home, savings, and garnishment.

Report ALL accidents to your insurance company even if you decide not to file a claim

Your policy requires you to notify the insurance company if you’re in an accident. That’s because the second you hit someone, your insurance company incurs a liability. Even if you settle a fender-bender accident on your own and pay out of pocket you still have to report the accident to your insurance company! It won’t count as a claim. However, if you don’t notify your agent and the other person makes a delayed claim for injury, your company can deny coverage.

Free accident forgiveness insurance isn’t always free

Many companies advertise their free accident forgiveness policies that promise not to raise y our rates after your first accident. But there’s no free lunch in the insurance business. Those companies often adjust the premiums sky-high for the second accident or driving violation.

Never cancel an existing policy until you receive the new policy paperwork

A quote from a new company isn’t an acceptance. If you’re changing companies, wait until your new insurance company issues a “binder” proving that you’re covered or sends you the actual policy before you cancel your existing policy. That’s because insurance companies can refuse to “underwrite” you even after they’ve accepted your check and issued a “binder” if they find you’ve lied to them or somehow shaded the truth (teen drivers living in the home, recent tickets, or even recent garnishments).

©, 2021 Rick Muscoplat

Posted on by Rick Muscoplat


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