Car Insurance: 10 Ways to Keep Your Rates Low- Part 2
Now that you have read part 1, here are five more things you can do to help keep your car insurance costs low.
6. Taking Advantage of Discounts
The word discount is great marketing, and insurance companies throw the term around constantly! Discounts exist for almost everything, but what they actually mean by discount is rating factors. If the insurance companies determine that college graduates tend to have fewer accidents, they can charge them a lower price, and boom—discount! If you don’t drive your car to work, you probably aren’t using it as much, which results in a lower risk, and boom! There’s another discount.
Just because one company is offering you 10 discounts and another company is only offering you five, it doesn’t mean they are going to be more competitively priced. There are four discounts that are almost universal and should be taken advantage of whenever possible: the pay in full discount, automatic payment discount, multi-policy discount, and claims free discount. Some of the biggest discounts you can receive are for paying in full sometimes up to 7%-10% and multi-policy discounts up to 20%, when you bundle your auto insurance with the same company and your home insurance or life insurance. With that said, here are some additional tips to help reduce insurance costs and take advantage of discounts.
7. Don’t Sacrifice Coverage
Some insurance companies have created a price obsessed market. I see commercials everyday that barely even mention the product and focus solely on saving money, but this is a risky strategy for you individually. When naming your price, something has to give, and that is usually your coverage.
Every company offers different limits on the insurance that they will pay out when you are at fault for an accident. This is your liability coverage. It usually looks something like $100,000 limit per person you injure, up to $300,000 total, and another $100,000 for damage you cause to someone else’s property.
Legal requirements have much lower limits that look more like $25,000 per person with $50,000 per accident and $20,000 for property. Lowering your coverage limit and blindly increasing your deductible is not the way to get the best deal, and cheap auto insurance isn’t the most effective way to save money. In fact, if you are in an accident, you may find it far more expensive when most of the payment is coming out of pocket. This is called an insurance gap and should be avoided whenever possible.
Also, many insurance companies weigh this into their pricing. If you don’t value your coverage and just want the absolute minimum, they may consider you a greater risk because you should care about preventing insurance gaps. Most insurance providers seek out people who are responsible enough to choose higher coverage and give out discounts accordingly. So, if you notice you have lower liability limits, see what it costs to raise them. You would be surprised how little it affects the monthly premium and in some instances may even lower the price.
8. Keep Young Drivers in Older Vehicles
If you have multiple drivers in your family especially young children who are newer drivers, it is smart from an insurance perspective to have them drive an older vehicle. Young drivers are the most likely to have an accident because of their inexperience, which results in higher premiums.. If you have an older vehicle with adequate liability coverage on it, consider having your young driver on this vehicle to help keep the costs low.
9. Lock in Your Rate with Erie Rate Lock
Rarely does Bridge First Insurance promote a specific feature of one company that we represent because we try to stay unbiased. We want our clients to know we truly have their best interests at heart, but the Erie Rate Lock feature is a favorite of ours. A lot of companies will offer accident forgiveness, but this feature is flawed. What you heard and probably believe about accident forgiveness is that your premium won’t go up when you have an accident, but what it really means is that they won’t surcharge you or add an additional charge on your policy. However, they will re-rate you as someone with an accident, and surprise, surprise– your price still increases.
Erie’s Rate Lock works a little differently. With Erie Rate Lock, they promise that your price will stay the same as long as you live at the same residence, drive the same car, and have the same drivers on the policy. For example, changing from an old Honda to a new BMW is generally a significant change in insurance risk, but as long as your main rating factors stay the same, they won’t increase your price, even if you have a claim or get a ticket. So, you can see why the Erie Rate Lock is a great feature we highly recommend.
10. Consult Your Agent or Even Better, Consult Us!
There are tons of factors that go into determining your insurance price. It helps when you have a knowledgeable insurance agent to guide you through the confusing world of insurance and make sure you are getting the best possible value out of your coverage. This could be anything from matching you with the right company, making sure you are taking advantage of all the discounts, getting the best possible coverage, or even helping you determine whether or not to file a claim. Navigating in the price driven world of online insurance can be a dangerous, but an independent insurance agent will help you make the right decisions. If you found the information in this blog helpful, please be sure to like, share, and of course reach out to Bridge First Insurance anytime!
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Jack has achieved success in the insurance industry through a consultative and honest approach to clients. He designed this approach around educating clients on important coverage and allowing them to decide what policy would best fit their insurance needs. In 2013, Jack and co-founder Dave Zappacosta, established Bridge First Insurance, as an independent insurance agency operating in Virginia, DC, and Maryland.