Like most drivers out there, you are probably overpaying for auto insurance. You work hard to be a responsible, accident-free, ticket-free driver but your premiums remain high or they even increase on occasion. The insurance market is saturated with many insurance companies so the good news is you can always shop around for favourable auto insurance quotes.
Before you start to explore your different options and hastily re-sign with your current company or with a new one that does not give you the best possible quote, below are 5 steps you can take to lower your auto insurance and receive a quote you deserve and that fits your budget.
1. Keep a clean driving record
This is an obvious pre-requisite to lower auto insurance premiums. Accidents and speeding tickets result in fines and demerit points that demonstrate that you are a risk behind the wheel. Accidents stay on your driving record for six years and tickets stay on for two years. Insurance companies want to insure drivers who are consistent, accident-free, and conviction-free to reduce the chances of having to reimburse drivers for claims due to accidents that could have easily been avoided. Pay attention when you drive and obey posted speed limits or be prepared to pay high insurance premiums if a company will even choose to insure you at all.
2. Take advantage of discounts
Many insurance companies offer a considerable amount of discounts to drivers who are considered low-risk clients. These include incentives for students with good grades, drivers who have taken training courses, members of alumni and professional associations, members of unions, and drivers who install anti-theft devices or snow tires. When exploring different insurance companies, find one with discounts that you are eligible for. This will reduce your insurance premiums noticeably.
3. Go high on deductible
When signing up with an insurance company, you have the ability to choose the deductible you pay when you file a claim. While it is always tempting to choose the lowest possible deductible, opting for a higher one will reduce your insurance premium considerably. A higher deductible means you will pay more out of pocket if you file a claim and the company will have to pay less to compensate you. Increasing your deductible can cut your premium up to 30% or 40% if you choose the highest possible deductible. Just be sure that you can afford the higher deductible in the event you need to file a claim.
4. Shop around yearly
Factors such as buying snow tires, accidents or demerit points being taken off your record, or your discount eligibility changing can happen at any time and this could cause your insurance premiums to change drastically. For this reason, it is beneficial to shop around for more favourable quotes yearly, specifically at least a month before your current policy expires. Obtain quotes from at least five different companies or to make the process easier, contact an insurance broker who has access to quotes from multiple different companies or use an auto insurance specialist that can do the same.
5. Use one company
Bundling such policies as house and life insurance with your auto premiums will guarantee you a favourable rate. A discount for combining plans usually averages about 15%, saving you a considerable amount over the course of one year. It is also beneficial to bundle all auto insurance policies in a household as this also leads to significant savings. This process is usually easy if dealing with a company that sells their own products but because a broker does business with many insurance companies, it is possible to have different policies with different companies, making you ineligible for a multi-policy discount.