Nobody wants to overpay for necessities like gas, rent, and cellphone service. The same holds for car insurance. And just as you can search for deals on other purchases, you can hunt for ways to lower your car insurance costs.
Given that the average good driver in India pays INR 10,000 a year for car insurance, reducing your insurance bill by just 5% to 10% can put more money in your pocket. Sometimes, you could slash your car insurance costs by 30% or more. Here are 10 tips to help you drive down your car insurance premium.
1. Shop Around
Many of us shop around for bargains on electronics, clothes, and other everyday purchases. You can apply the same strategy to car insurance.
Whether you are getting insurance for the first time, renewing coverage, or switching to a different insurer, don’t overlook the savings you can score by comparing rates from several auto insurance companies.
Car insurance rates for the same coverage can vary significantly among insurance companies, so if you don’t shop around, you won’t know how much you can potentially save. The industry-backed Insurance Information Institute suggests obtaining quotes from at least three insurers to compare car insurance costs and coverage.
Be sure to compare identical policy coverage and limits so it’s an apples-to-apples price comparison.
Related: Best Car Insurance In India
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2. Review Your Deductibles
A car insurance deductible is an amount taken from your insurance check when you file a comprehensive or collision insurance claim. You choose your deductible amount when you purchase a policy, and you can adjust your deductible later if you change your mind. A higher deductible means you pay a lower premium. That’s because you’re taking on more of the costs if you file a claim, and you’re less likely to make claims for minor damage because the repair costs won’t exceed your deductible amount by much.
3. Bundle Insurance Policies
TV commercials often promote the ability to bundle auto and home insurance. Most insurance companies offer discounts to policyholders who carry both auto and home policies, and bundling can apply to other coverage, such as motorcycle insurance.
Generally, a bundling discount (also known as a multi-policy discount) can reap savings of 5% to 25%.
Not only can you earn a discount from bundling, but also purchasing more than two policies from a single company “also simplifies your insurance, as you have it with one carrier,” Nelson points out.
4. Explore Car Insurance Discounts
Auto insurance companies offer a trunkful of discounts aside from bundling discounts. Some of the most common discounts include:
- Multi-car discount. Insuring more than one vehicle with the same insurer might offer better deals and discounts.
- Vehicle safety discount. You might qualify for a discount if your car has the latest safety features, such as anti-lock brakes and airbags.
- New car discount. Are you driving a car that’s less than three years old? If so, you could pick up good car insurance with a low premium.
- Good driver discount. If you go a certain amount of time without an accident or a traffic violation, your car insurer might reward you with a discount.
- Good student discount. Good grades can pay off. Some insurers extend discounts to a full-time high school or college student who’s aged 16 to 25 and earns at least a B average.
5. Let Your Insurer Track Your Driving
Several car insurers enable you to potentially trim your bill by signing up for usage-based car insurance. These programs use an app or device that plugs into your car to track your driving behavior. Factors tracked can include how many miles you drive, speeding, and how often you slam on the brakes.s
6. Take a Defensive Driving Course
Successfully completing a defensive driving course that’s approved by your insurer can result in savings on your car insurance.
7. Park in the Garage
Some insurers will lower your car insurance if you park your car in your home garage rather than in your driveway or on the street. Data shows that cars parked in garages are less prone to being stolen or having crash damage.
8. Drive a Safe Car with Low Repair Costs
When you’re visiting car dealerships in person or online, take into account the type of car you’ll be buying. Some cars are cheaper to insure than others.
In addition to your age, driving record, and other variables, car insurance companies consider the type of vehicle you drive when pricing your coverage. They look at how likely it is that a certain car will be stolen, how much it typically costs to repair that kind of car, how safe it is, and the amount of claims made for similar models.
9. Boost Your Credit if Possible
Most insurers also consider credit-based insurance scores during the insurance premium calculation. This score predicts the probability that you’ll file a car insurance claim. The lower your credit-based score is, the higher the odds are of filing a pricey claim. Raising your traditional credit score might also lift your credit-based insurance score, paving the way for better car insurance rates.
10. Pay Your Premium in Full if Possible
Instead of spreading out premium payments by paying monthly, consider paying your premium in one lump sum. Many car insurers will give you a small discount for doing so.
