Insurance premium: 10 Simple Tips to lower your costs

Insurance premium: 10 Simple Tips to lower your costs
October 13 19:24 2016

Learn How to Lower your Insurance premium easily

Insurance premium is the price that you, as the policyholder, have to pay in order to receive insurance coverage in case of an unfortunate incident, a car accident for instance. It is the amount payable by the purchaser to benefit from the guarantees provided by the insurance policy.

In case of modification of the guarantees, the insurance premium will be increased or decreased accordingly. The premium can be paid at once by a single payment, single premium; or several times at regular intervals (monthly, quarterly, semiannually…) by payments of a set amount, regular premium. Regardless, being an insuree, important for you is to find a good service at good quotes. And to do so, you need some tips.

Note that these tips are general; some of them can be applied for almost all types of insurance: Health, auto, and others.   Here are 10 Tips to lower the amount of your insurance premium.

10 Tips to Lower Auto Insurance Premium

Insurance premium1- Keeping a good Record

It does pay to be a good driver. Having a good driving record increases your chances of receiving good quotes for your insurance premium. The first tip is to appear as a careful driver in the eyes of the potential insurer and thus prove that you have not been in any accident during a long period. If you never get involved in any accident at all it is even better. In case the agent is reluctant to lower your premium feel free to put forward this argument of being a good driver with a good record.

2- Having Safety Equipments in your Vehicle

According to many expects in the field, you can get up to 30% off if you show insurance companies your car is equipped with airbags and automatic seat belts.  An anti-lock braking system (also known as anti-skid braking system or simply ABS) is also an unavoidable option. With the ABS, you will get a reduction of approximately 5% discount on your auto insurance. This is explained by the fact that these tools reduce the severity of accidents and therefore the amounts of compensation to pay in case of an accident.

  1. Analyze your target search

Not all insurers offer discount for the same criteria. For instance, some insurance companies favor the profiles of single woman with children while others make a better offer to married couples. Others have more consideration for drivers without previous accidents. Inform yourself well on the profile preferred by the company you aim to get your insurance premium from. Ensure and verify that you fit the profile they valorize; otherwise it may be impossible to have a good quote from that particular insurer.

    4. Removing unnecessary options

Check the services, but also the guarantees included in your insurance discount. It may happen some benefits that you have not requested are added to your coverage. Most of the times, some them are completely useless to you; yet you pay for them. Ask the insurance agent or representative to get rid of them. By removing them from your contract, you can request a decrease in the amount of the insurance premium.

  1. Compare car insurance Quotes

From the perspective of an insurer, all drivers are not equal: young people, seniors, safe drivers…

Depending on your profile and your insurance record, you may be paying your car insurance much more expensive than others. Insurance companies offer prices that can vary from one insurer to another. It is smart to compare, and choose the one that offer lower quotes. Some websites allow you to compare many multiple quotes with one simple click. You can Google them and compare before your purchase any policy.

  1. Moving to New Place

Insurance premiumThis tip may sound a little exaggerated for some readers, but it works. Geographical location is among criteria taken into account in the price difference of car insurance by most companies.  Not all regions are equal in the eyes of the car insurers. Here is a vivid example: Being in Florida, I pay nearly $250 per month for a Honda Civic. Ironically, I have a nephew in Ney Jersey who pays less than $200 for a luxury Buick.

Here are top 10 States with the highest car insurance rates:

  • Michigan: $2,476.
  • Montana: $1,886.
  • Washington, D.C.: $1,799.
  • Louisiana: $1,774.
  • Florida: $1,742.
  • West Virginia: $1,716.
  • Connecticut: $1,690.
  • Rhode Island: $1,656.
  1. Accumulate your bonus

Certain car bonus programs, such as no claims bonus (NCB), allow you to accumulate points/bonus over a number of years in which you have not made a claim on your car insurance policy. With the principle of no-claims bonus, you are most likely to lower the amount of your auto insurance premium over the years if you are a safe driver. It’s simple: you start with a coefficient of 1, and then every year you did not cause an “at-fault accident” you get a 5% discount on the basic coefficient.

Each year, 5% is subtracted from the same coefficient, with the possibility of reducing your insurance premium up to 50% after 13 years without causing an accident. 13 years is a long time, but the reward is worth the effort.

  1. Balance the levels of coverage and deductible

Unlike what some people think, full coverage car insurance does not obligatory covers all risks; the term is a bit misleading. It is generally used to refer to policies that include collision and comprehensive insurance, thus covers very specific risks. In short, “Full coverage do not really exist.”  You are obligated to choose between a basic insurance, offering minimal protection, and a full coverage, which is complete but much more expensive. Choose the policy you really want.

To better assess your policy, you can play with your levels of coverage and deductibles and so build yourself an auto insurance that really meets your needs. Here is an example to help you.  You drive a used car. Its value has fallen sharply and the compensation offered by the insurer in case of accident will be much less. Is it really useful, in these circumstances, to buy a full coverage auto insurance?

  1. Pay how you drive (PHYD)

Certain policies, such as pay as you drive (also known as usage-based insurance and mile-based auto insurance) allow you to pay your insurance premium based on type of vehicle you drive, measured against time, distance, behavior and place. This is a real Potential cost-savings if you are a responsible and less active driver. Submit your driving habits to insurers through a box installed in the vehicle can help to significantly lower your auto insurance premium, while encouraging you to drive better, since you know you are being observed.

There are other ways to align your auto insurance with your driving habits, including car insurance kilometer calculator. You pay based on the number of kilometers traveled during the year. For an insurance company, the less you drive, the less you are likely to cause or be the victim of an accident, hence the advantage on the amount of the premium.

  1. Choose a less powerful car

The amount of your car insurance partially depends on nature of your vehicle. That’s true for the fastest and biggest (or powerful) vehicles, which create risks of major accidents requiring more expensive repairs. This is the reason an average car can cost up to several hundred dollars cheaper than a very fast vehicle. Most car insurance companies offer quotes depending on the type of the vehicle. If you want to save on your insurance premium and under no obligation to drive these types of cars, just avoid them.

These are just some tips to help you save on your car insurance premium. Using them can surely help you save hundreds of dollars while still receiving the same great service. But remember, the policies are constantly changing; if you feel sometime is unclear when negotiating your policy, ask questions to your insurance broker…

 

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