Do You Have the Auto Insurance Blues?

By Catherine Powell

Image courtesy pxfuel

If you own or lease a car you undoubtedly have auto insurance.  That’s because every state in the Union with the exception of New Hampshire requires residents to carry auto insurance.  In fact, if you’re found to be operating a motor vehicle without insurance coverage, the penalties can range from $150-$1,500 depending on the state in which you live.  While many motorists complain about the high price of auto insurance, think of what would happen were they not covered. If they were involved in an at-fault accident, they would not only be required to cover the damages incurred by the driver of the other vehicle, they’d also open themselves up to lawsuits by any passengers who were in either vehicle.  When you consider the fact that the average cost of auto insurance in the US is $1,416 in 2020, that’s a small price to pay to secure peace of mind that should you be involved in an auto accident, the costs won’t bankrupt you.  Still, if you want to reduce the bite that auto insurance takes out of your wallet, there are a few things you can do that won’t water down your coverage.

What’s a driver to do?

Other than reducing the options and limits contained in your policy, there are several things that you can do to cut the cost of insuring your ride:

      1.      How high is your credit score?  All insurance policies are predicated on risk.  Aside from assessing your age and driving record, another thing that insurance companies from coast to coast use to price their products is the policyholder’s credit score.  Those drivers with higher credit scores are seen as less risky than those with lower scores.  A solid financial background is viewed as an indicator of stability.  This means if your score is below 800 and you want to lower the cost of auto insurance, do whatever it takes to raise your credit score.

      2.      Want to save a bundle?  Then consider bundling your auto policy with your homeowner’s policy, your boat insurance and any other insurance policies you currently carry.  By giving one insurer all your business, they will offer you better rates on all your policies.

      3.      If you want to lower the cost of insurance, consider raising your deductibles.  Especially if you have seldom or never submitted a claim, raising your deductible from $250 to $500 or $1,000 will provide a significant reduction in the cost of your policy.

     

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4.      Consider driving a safer car.  Just as drivers are assessed when it comes to risk, so to are vehicles.  That means if you have your heart set on a sports car or luxury sedan, you can expect to pay more to insure it. However, that doesn’t mean you have to drive a car with zero sex appeal either.  Three of the cars that are sporty yet inexpensive to insure today include the Hyundai Sonata, the Mazda CX-3 Sport and the Jeep Wrangler Sport S. 

      5.      When’s the last time you talked to your insurance agent about available discounts?  Here’s a list of available discounts that could save you money:

a.       If you’ve been accident-free for the past 3-5 years, some insurers will knock as much as 5% off your rate.

b.      If you add security devices to your car such as a car alarm, ignition kill switch or a tracking system, your rate could drop from 5-20%.

c.       Many insurers will give you a reduction if you sign up for auto-pay.  All insurers will reduce your rate if you pay your premiums either every 6-months or yearly as opposed to monthly.

d.      If you’re a new driver or a senior citizen, taking a defensive driving course can also help you reduce the cost to insure your vehicle.

e.       Some insurers will take as much as 10% off if you renew your policy early.

f.        Many insurers will either reduce your rate or reduce your deductible provided you keep renewing your coverage with them.

g.      The same is true if your family insures more than one vehicle with the same insurer.

h.      Did you know that saving some trees can also save you some money?  Ask your agent if going paperless can reduce your rate.

i.        Reducing the number of miles your drive each year can also save you money.

j.        If you’re over 65, a senior citizen discount may also apply to your policy.

What should drivers refrain from doing?

While it’s obvious that having an at-fault accident, being convicted of a DUI, or getting a ticket for a moving violation is sure to cause your rate to increase, there are some not so obvious blunders that drivers can make:

      1.      Letting your coverage lapse will not only cause your rate to rise significantly, it can also make it difficult for you to secure insurance from another carrier.  Even if you sell your vehicle, you still need to maintain coverage.  If you don’t and you wind up in an accident with someone else’s vehicle, not only would you be in for a serious financial downturn, you could also face severe penalties from the law to include fines, a suspended license and even incarceration.

Image courtesy flickr

      2.      Thinking of moving?  Before you start packing the moving truck, it might be a good idea to discuss your intended destination with your insurance agent.  Location is one of the most significant factors in determining insurance rates. And I’m not just talking about moving out of state.  A move from one side of town to the other or from one neighborhood to another could significantly impact your cost to insure your vehicle.

      3.      Where does your car sleep?  Another thing that can affect the cost to insure your vehicle is whether it’s kept on the street or in your garage.  A car that’s parked outside is ten times as likely to get broken into or have hail, tree limbs or debris cause damage to it. 

The bottom line is if you have the auto insurance blues, the best way to turn that frown upside down is to have a conversation with your insurance agent to find the route to savings.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more ways to save on flood insurance, check out her website at http://aplusallfloridainsuranceinc.com/