Wondering about car insurance? Go Big!

If you’re trying to save money on car insurance, we advise you to “go big!” Many companies offer flashy insurance rate discounts but faced with a choice, would you rather get the advertised 5% deduction for a spotless driving record or a 50% discount based entirely on the company you chose?

Three Rate Inducing Factors

If only getting the cheapest car insurance rates relied solely on your suave negotiating skills. Unfortunately, obtaining the lowest rates possible takes a little work-the good news is we’ve narrowed that work down to three categories.

  • Alter your coverage terms in a significant way.
  • Buy a new car.
  • Find the same coverage elsewhere for less.

Get ready to man phone and spend a little time researching online. Despite the initial research, this is the easiest way you’re going to save money this year.

Alter Your Coverage: The Little Black Box

Change your car insurance policy terms and save money. Car insurance coverage calculates the cost of your accident before you have it. This means, if you own a $50,000 Mercedes-Benz and your policy covers 30,000 worth of bodily injury and property damage, your insurer is calculating you as a $350,000 policy risk. What can you do?

Prove that you are such a safe driver you won’t get in an accident. The proof is easily accumulated by installing a black box that measures driving behavior. The box calculates how fast you speed-up, turn, and stop. The information it gathers can help you earn discounts as high as 50%. Companies such as Allstate, Travelers, Progressive, and State Farm offer these kinds of plans.

Con: The most significant discounts go to drivers who drive during the “safest” times of day and don’t drive very much. Drivers who brake hard (most common reason drivers get “dinged”) get higher rates.

Pro: The black box can save you more money than any other method. But, if having Big Brother in the car with you isn’t palatable, there are other ways to reduce your insurance rate.

Alter Your Coverage: Raise Your Deductible

car insurance deductible savings

Know your deductible!

The savings aren’t as big but the premiums on collision and comprehensive insurance are significantly smaller than what is paid on liability coverage. If you can save enough money to cover the difference of your deductible, it could mean a $50 to $100 reduction in your yearly rate.

Alter Your Coverage: Take the Fastest Way Home

Insurers wager that the less time you spend on the road, the less chance you have of getting into an accident. The minimum number of miles insurers will accept as a yearly driving total is 7,500 miles per year.

Alter Your Coverage: Lower Your Liability Limit

Lower liability limits if you can. This action is not recommended if you’re a homeowner or have significant savings- anything an opposing lawyer might go after for their client.

Swap Your Car

You can buy a new car to save money on car insurance. It’s a very expensive way but it could work. Just keep in mind that if your current car is old your insurers will see your newer car as a more expensive replacement. You also have to remember taxes and fees on a purchase. Why go this route? The goal is to save money right? But if you do need a new car, buy one that is cheaper to insure. Look at traits desirable to an insurer. For example, going from a four-door to two-door can dramatically change your insurance rate.

Swap Insurance Companies

This isn’t personal, it’s an algebraic equation. Every insurance company has its own rate-generating formulas. Different weights are applied to rating factors like zip code, driving record, and credit score. Insurers want to balance the likelihood of a claim against the amount of income they’re generating from customer paid premiums. If they all had the same factoring process, they’d offer the same rates. Remember that any significant factors like a DUI on your driving record or a claimed teenager can make a huge difference on your insurance premium.

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