10 Ways to Save Money on Auto Insurance

 By Catherine Powell

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I have good news and bad news when it comes to Florida auto insurance rates.  The bad news is that the cost to insure vehicles in the Sunshine State has increased by an average of 17% over last year.  This has to do with a number of factors, including hurricane damage, the high number of uninsured motorists in the state, an uptick in auto thefts, and rampant claims fraud.  The good news is that if the cost of insuring your vehicle in the coming year has you seeing red, there are many ways you can reduce your premiums without breaking the bank.  Below is my top-10 list of ways to reduce the cost of auto coverage.

#1: Pay yearly instead of monthly.  You can save money instantly by paying your premium every 6-months or yearly.  That's because insurers don't have to worry about account receivables or the potential for missed payments.  You also won't have to pay the financing fees that get tacked onto your bill when you pay monthly.  If you can afford it, this is a win-win for both parties.  If you can't afford to pay in advance, opting in for automatic payments can also save you some money.

#2: Have you ever considered bundling your policies? Do you have homeowner's insurance, boat insurance, or some other form of coverage with a major carrier?  By bundling policies under one insurer, you could save as much as 20%.  This tactic not only costs you nothing, but it simplifies the payment process since you won't have to deal with multiple insurance companies.  If your family owns more than one vehicle, ask your agent how much a multi-car discount can save you.

#3: Beef up the security of your vehicle.  With the rate of auto theft skyrocketing across the nation, augmenting your vehicles security can provide a financial benefit once your insurance company learns of it.  Everything from alarm systems and ignition kill switches, to steering wheel locks and tracking systems can earn you a discount from your insurer.  Before you spend a dime, touch base with your agent to find out what security additions qualify.

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#4: Opt-in for telematics. It used to be that insurance risk was predicated on the odds of the herd.  By that I mean that actuarial calculations couldn't be individualized since there was no way to precisely gauge how well an individual drove his or her automobile.  Well, all that has changed with the advent of technology.  Every automobile and light truck manufactured today is able to track everything from acceleration and deceleration to braking and turning velocity in real time.  This has enabled insurance companies to give their policyholders the ability to opt-in to have their driving habits analyzed.  If your insurer participates in telematics, they'll mail you a data retrieval unit that you can plug into your vehicle that will retrieve and transmit your vehicle's driving data back to company headquarters.  Once installed, the unit is left in place for several months.  Many insurers will even share the monthly reports with you to help you improve your driving habits.  When the test period is over, you may qualify for a discount provided you don't drive too aggressively.  Even if you don't, your insurer can't use the data against you.

#5: Take a defensive driving course. Another way to reassure your insurer that you're a good driver is to take a defensive driving course.  Some insurers even allow online accident prevention courses to qualify for a discount.  No matter how old you are, participating in a refresher course designed to improve your driving skills will decrease your odds of having a traffic accident.  Talk to your agent to find out which courses apply. In Florida, this could save you as much as 10%.

#6: Improve your credit score, reduce your insurance cost.  Like it or not, credit worthiness can make or break you when it comes to insurance.  That's because insurers like to get paid on time.  They don't like to work with policyholders who are late with their payments, just like any other business.  Unlike most other businesses, they use credit scores to determine a policyholder's risk before setting a rate.  The lower the credit score, the higher the premium.  That means if you want rock bottom insurance rates, you need to make sure your credit score is as high as possible.  Several things you can do to improve your score is to make sure you pay all your bills in a timely manner, avoid maxing out your credit cards, review your credit report monthly, and refrain from closing existing credit accounts.

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#7: Ask your agent to let you know about any discounts you qualify for.  Just as there are many makes and models of automobiles, there are scads of discounts that you may not have heard about. If you opt-in for paperless statements or auto-payments, you may qualify for a discount on your auto insurance.  Likewise, if you belong to certain clubs or organizations, you may knock some money off your premium.  Members of the military, veterans, and those related to those in the military may qualify for a discount. So too can drivers who rack up fewer miles than average and students on the honor roll.  In short, it benefits you to touch base with your agent before you renew your policy to see if there are any discounts that you can take advantage of in the coming year.

#8: Clean out your garage. If you don't park your vehicle in a garage, not only is it more likely to get stolen, there's a possibility that it could get vandalized while you sleep.  If you keep everything but your vehicle in your garage, here's one good reason to clear it out: It will save you money.  Not only do insurance companies provide lower rates to drivers who garage their vehicles, it also adds to its value once it comes time to sell it.

#9: Increase your deductibles. When was the last time you filed an auto insurance claim?  If the answer was never or many moons ago, you should consider increasing your vehicle's deductible if you want to save some money.  The more you're willing to pay in the event of a claim, the lower your premiums will be.  

#10: Work with an independent insurance agent. While there are apps and portals designed to help you compare insurance rates, the best way to find every last discount is to work with an independent insurance agent.  Not only do they have much more experience than you do when it comes to comparing insurance quotes, their insurance software is vastly superior to anything you can find for free online.

Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida.  To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/