The cost of auto insurance has gone up in the past year, so it’s getting more and more difficult to find a good level of protection at an affordable price. Everyone knows that the final cost of your car policy depends on many factors, from your zip-code to your age. But not all people are aware of the fact that they can control many of these factors. This guide explains how to slash the cost of your car policy. In addition to this you will get a list of factors that influence the cost.
How much is the cheapest car insurance?
In some cases your policy can cost not more than $240 per year or even $150 per year. Although such a cheap plan may look quite appealing, it has an obvious drawback: coverage is very limited.
The minimum limit is determined by a state law and therefore varies from state to state. Residents of most states have to buy at least liability coverage. And in some states Personal Injury Protection (PIP) is mandatory (especially no fault states). In addition to this, every state has its own rules as for setting insurance rates, and so the list of factors that can play into the cost of you auto coverage is different depending on where you live.
Basic car insurance cost. What factors you can change?
- Level of coverage.
The most costly option, in general, is comprehensive coverage. And if you’re looking for the cheapest insurance, third party may be a smart buy. However it’s important to bear in mind that this isn’t always true!
If you are ready to pay more upfront before you make a claim, you typically have a lower premium.
If you install a high-tech immobilizer or some other security device, it may help to reduce the risk, so the cost of your auto coverage will go down.
Basic car insurance cost. What factors you can’t change?
- Driving record.
Clean driving records do wonders. And those who have points on their license, have to purchase insurance at higher rates as they are automatically considered to be high-risk drivers. Driving conviction works in the same way, making the cost of auto insurance higher.
- Previous claims.
Have you heard of a no-claims discount? Everyone who has never had a claim is eligible for this type of discount. Many insurers charge less if they know that you make claims very rarely.
Younger drivers are more likely to have an accident. So it’s hardly a surprise that they are typically obliged to pay higher insurance premiums.
What else affects your car insurance cost?
- Your address.
Insurance rates for places with a high crime-rate are typically higher. And if you live in a low risk area, your premiums will be more affordable.
Those who drive less, pay less for their car coverage.
- Your parking.
A garage or driveway is a good choice, whereas parking on the road can be risky because of high probability of theft.
Bare minimum car insurance
Bare minimum car insurance is typically calculated according this formula: 10/20/10. What does it stand for? The first “10” means that your insurer will pay not more than $10,000 per person for bodily injury, not more than $20,000 for bodily injury all together for one accident, and $10,000 for property damage. So it means that if there are, for instance, four people in one car, each of them gets not more than 5,000 as 20,000 is your limit for the whole accident. And if you total a very expensive vehicle, bare minimum is far from enough. However this is the cheapest car insurance one can buy.
How much is cheap car insurance?
The only safe answer to this question is: “It depends”. All the factors mentioned above affect the final cost of your auto insurance policy. However keep in mind that lowering your premiums sometimes means sacrificing quality. One possible drawback is less-than-adequate coverage, and low premiums may also involve working with an insurer with bad customer service. However that is not always true!
9 steps to make your car insurance cheaper
- Check you auto insurance costs before you purchase a vehicle.
Insurance premiums vary depending on the make and model of your vehicle, its specific characteristics and price, as well as safety record etc.
- Buy several policies from one carrier.
Some carriers offer discounts for those who purchase, for instance, a homeowner’s coverage and an auto policy. Consider insuring all cars in your household and all your driving-age family members on one policy. Still don’t forget to check whether this strategy is worth it.
- Shop around.
As you compare auto insurance quotes from different companies your chances to find cheap car insurance grow. At least three providers should be taken into consideration.
- Drive less, if possible.
Probability of an accident or emergency goes up with mileage. If you drive less, you will be eligible for mileage discounts offered by many insurance carriers.
- Drive safer.
Those who haven’t had any moving violations for a number of years can get a discount for safe driving. A defensive driving course can also make you eligible for a bonus.
- Increase your deductible.
Some experts suggest that you set aside a part of your monthly premium savings so that eventually you can afford a higher deductible.
- Ask your carrier about additional discounts.
As any company has its own unique offers, it is wise to find out whether there are any discounts for which you qualify.
- Maintain your credit records stable.
- Reduce insurance coverage on older cars.