Subscribing to a car insurance policy is a legal obligation. Car insurance protects you financially in case of an accident. Despite this, we all agree that we are all looking for ways to save as much as possible or to reduce this burden. In the following lines, we will see tips for taking out car insurance as cheaply as possible.
Car insurance, at what price?
When you take out an insurance policy, the cost can vary from one company to another and depending on several factors, such as the options offered, the country, the type, and age of the vehicle, etc. According to Investopedia, in 2020, the average cost of insurance was $1,176 per driver (data provided by the National Association of Insurance Commissioners, NAIC).
Tips to reduce the cost of your car insurance
When it comes time to choose your car insurance, you wonder which car insurance company to choose, the one that will be the most economical for you. Apart from the choice of the insurance company itself, there are several elements on which you can play to reduce the cost of your car insurance.
Opt for the “Pay-As-You-Go” option
Opt for this option when you use your car little. It is suitable for drivers who do not travel much with their vehicle (for reference, less than 10,000 miles per year in mileage). This way, you will benefit from a reduction at the time of subscription and periodically. The only constraint is that you should accept your insurer installing a telematics device to evaluate your driving. Similar to the “Pay-As-You-Go” formula, the mileage-based insurance is a new formula offered by insurance companies. This formula allows you to pay only for a certain number of miles, a very interesting formula for car owners who use their vehicle very little.
Family or multiple subscription
You will generally benefit from a reduction in insurance costs if you subscribe to several vehicles at the same time and with the same company. The only restriction is that the drivers must live in the same house and be from the same family. Furthermore, some insurance companies offer discounts if you subscribe to other insurance policies with them, such as home insurance.
Sign up for a defensive driving course
When you take accredited defensive driving courses that allow you to acquire notions of caution in terms of driving, you can benefit from reductions in the cost of your car insurance policy from certain companies.
Install an anti-theft device on your vehicle
Some insurance companies grant discounts and cost reductions for subscribing to the insurance policy if you install an anti-theft device. If your company offers such an advantage, you should approach them to find out the types and models allowed.
Shop around insurance companies
Consult the offers of several insurance companies to choose the most competitive one. Request a quote by providing the same information to obtain prices on the same basis from insurance companies. A tip is to change insurers if necessary to get a better rate.
Only take the necessary coverage option
It is common for your insurance company to offer you a car insurance offer that includes several coverage options. Remember to carefully review the documentation to only retain the essential options for you. Therefore, choose the right level of coverage. This simple sorting will save you money. If you have a used car, before taking out insurance, also check whether your annual premium, taking into account the depreciation of your car, will be higher than the compensation you will receive in the event of damage.
Improve your credit score
Insurers, to calculate your insurance premium, take into account certain factors such as your past accidents, your traffic code violations, and your claims history. In countries where the use of solvency or credit score allocation is not prohibited, some use this technique to favor certain customers. Thus, a customer with a good credit score will benefit from cheaper car insurance. This score is often based on a client’s solvency history. In such a case, we advise you to improve your credit score over time by paying your insurance premiums and bills on time.
In summary, you have understood it well. By adopting the right behaviors, it is possible to reduce your car insurance premium. Consult several companies, gather enough information, and you will find the insurance policy option that suits you best and will not cost you an arm and a leg.
