Save on Car Insurance: 6 Overlooked Ways

While dozens of factors influence car insurance costs, knowledgeable drivers can often find ways to reduce their premiums and to avoid overpaying for their policies. Here’s a look at six overlooked ways to save hundreds of dollars per year on auto insurance premiums.

1. Take a Driving Course: Some states do not allow insurance companies to offer discounts to their customers. Most do, however, and one of the most overlooked yet common discount programs is the safe driver discount, which is offered to drivers who complete state-approved safe driving programs.

To graduate from safe driving classes, you generally need to attend a few classes and take a test. You can save a significant amount of money on your insurance premiums, however, and most safe driving courses are inexpensive or free. If you’ve recently picked up a traffic ticket or you were involved in a car insurance claim, safe driving courses are a great way to wipe the blemish off of your record and keep your insurance rates as low as possible.

2. Keep Good Grades: If you are a student and you drive, be sure to spend some extra time hitting the books this semester. Most insurance companies have discounts for students who keep a certain GPA, usually 3.5 or higher.

These discounts usually apply to students under a certain age or high school students specifically, so call your insurance provider for more information.

3. Ask About Payment Discounts: Most insurance companies offer heavy discounts for drivers who pay for their policies “in full.” This means that you pay for 6-12 months of your premiums at once. Payment discounts vary from one insurer to the next, but generally you can expect 10-20 percent off of your total bill.

You should also ask about discounts for specific payment options. Some major insurance companies offer online payment systems, and if you pay online or use a certain type of credit or debit card, they’ll discount your rates.

4. Keep Mileage Low: Some states authorize discount programs for low-mileage drivers. Your insurance provider may need to take mileage readings or install an impermanent mileage tracking device to qualify you for this type of discount.

Ask whether your insurer offers a low mileage program. If they do, you can drastically reduce your premiums by opting in. If you drive more than two hundred miles per week, however, look for other ways to reduce your rates.

There is, of course, another obvious benefit of keeping your mileage down – cheaper fuel bills. Say you are driving a 2012 Subaru Impreza with 30 MPG combined. This isn’t the most fuel efficient model on the road by any stitch of the imagination, but it isn’t the worst either. If you work 30 miles away, not driving your car to work just one day per week will shave 10 gallons off your bill each week, or 520 gallons each year. At $3.80 per gallon, that works out to be a saving of nearly $2,000!

5. Reduce Your Coverage: Many drivers are under-insured, so this tip isn’t for everyone. However, if you don’t spend much time operating your vehicle, you should read your policy carefully to decide whether or not you’re paying for excessive coverage. As a rule of thumb, infrequent drivers don’t need extremely high limits.

Some drivers may not need specific types of coverage. If you drive a fairly inexpensive vehicle that you own, you might opt out of collision coverage and comprehensive coverage. Read your policy carefully and make sure that you understand how your coverage works in order to decide whether you can safely reduce your coverage limits or extend your deductibles to reduce your premiums.

6. Compare Rates Online: By shopping online, you can find out whether you’re overpaying for your insurance policy fairly quickly. Use a comparison website or gather quotes directly from a few major insurance companies. You might save 20 percent or more by switching from your current carrier to a new provider.

Above all else, keep an eye on your policy premiums. Check your rates every few months and ask your insurance provider about ways to keep your costs low. With a little attention, you can often drastically reduce your car insurance premiums and reduce your annual coverage costs by hundreds of dollars.

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