Car insurance is something you have to pay for but hope you never have to use. Most likely, you dutifully pay your premium every month, but otherwise put it out of your mind – only thinking about it if you have to make a claim. But if you take a few minutes to ask yourself the following questions about your insurance coverage, you might be able to save some money for something you actually want to use!
1. Should I renew with my current provider?
If you allow your policy to automatically renew each year, you could be missing out on an opportunity to save money. Plans and rates change, so don’t assume that the provider who gave you a great rate last year will be the same provider who will give you a better rate this year. Researching other options doesn’t have to be time-consuming; there are many websites that will allow you to compare car insurance plans and quotes from the comfort of your couch.
2. Am I taking advantage of all available discounts?
While you’re comparing plans, also consider what discounts you’re eligible for. Ways you may qualify for a discount include the following:
- Installing winter tires during the colder months. I
- Completing a drivers education course
- Installing a car alarm
- Parking in a garage
- Having a short commute to work
- Being married!
3. Does my car need collision coverage?
There are some types of coverage that are non-negotiable, but you might be surprised to learn that collision coverage isn’t one of them. If you’re driving an older car, dropping collision coverage could make sense, and a few quick calculations will help you make the decision. First, you need to know how much you’re paying for collision coverage, and how much you’d pay as your deductible if you were to make a claim in the event of an accident. Next, do a little research on the value of your vehicle. If the amount you’re paying in your premium and deductible is more money than your car is worth, you might want to drop this type of coverage and save that money towards buying a new car if you were in a collision.
4. Can I pay my premium all at once?
Many insurance providers will offer a small discount if you pay your premium in a lump sum at the beginning of your term, rather than in monthly installments. Yes, you’ll need to have the cash in hand right away, but you’ll be paying less money in the long run. Once you pay the first lump sum, you can save the amount you would be paying every month so that you’re prepared the next time around.
5. Can I prove to my provider that I’m a safe driver?
Some insurance providers offer Usage-Based Insurance(UBI) plans, in which you outfit your car with a telematics device that tracks your driving behavior (such as speed, braking, and distance driven) and sends that information to your insurance company. Often, you’ll get a small discount when you sign up for this kind of plan, and if your data shows you are a safe driver, it can mean more savings when it’s time for renewal. If the data shows you aren’t a safe driver, insurance companies can’t use that information against you to increase your premium. This still doesn’t mean that you should drive aggressively or text and drive as that is a dangerous praxis and present a higher risk than paying a little extra n your car insurance.
6. Should I increase my deductible?
The deductible refers to the amount of money you agree to pay if you have to make a claim to your insurance provider. In many cases, raising your deductible comes with a break on your premium. This scenario makes sense if you have the cash available to manage the extra cost if you needed to make a claim. If you do raise your deductible, it might also be wise to use some of the money you’re saving to set up an emergency savings fund to help cover the costs of any unexpected expenses that could arise if you were in an accident.
If any of these questions made you think differently about your car insurance, it’s time to make a change. You can start by getting on the phone with your provider to make sure you have the right plan – and all the available discounts – for your car. Then, when it’s time for renewal, do your research before choosing a policy and compare rates to make sure you’re getting the best rate.