Keep your auto insurance costs at a minimum
May 1, 2014
Did you know that your safe driving record can greatly reduce your automotive insurance payments?
Michael Convery, a vice president at MetLife Auto & Home, told Fox News that many insurance agents provide discounts if you complete a qualifying driver safety course. Convery said a clean, violation-free driving record will net you big-time savings—as can the type of car you drive.
Making small claims after accidents can prompt red flags from your insurance provider.
Insurance providers typically offer discounts on cars that have enhanced safety features that risk decrease the risk of injuries or even theft.
Some people choose to take on a higher deductible plan in order to reduce their monthly auto insurance premium.
Loretta Worters, a spokeswoman for the Insurance Information Institute, said drivers with a $200 deductible can save 15 percent to 30 percent on collision and comprehensive coverage they take on a higher amount such as $500. She added that increasing your deductible to $1,000 can save you 40 percent or more on monthly insurance premiums.
But there is risk involved. The higher deductible means you are assuming more financial risk if something goes wrong. Your deductible is the amount that you must pay before your insurance kicks in.
Bill Wilson, vice president of education and research at Independent Insurance Agents & Brokers of America, told Fox News that time is key if you don't want to end up with damaging out-of-pocket costs in case you get into an accident.
“Don't raise the property deductible well past the point of sensible premium reduction on the theory that 'it will never happen to me,'” Wilson said. “The preferred approach is to increase deductibles during good economic times when you can afford a $1,000 to $2,500 loss while accumulating a deductible fund that can be used during hard times if a loss actually occurs then.”
It's not always a good idea to make smaller claims, according to CNN Money. Smaller claims can be a red flag to many insurance providers and can prompt a hike in monthly premiums.
Maintain good credit standing?
Similar to landing a mortgage, a solid credit score can make it easier to navigate the auto insurance landscape.
“Most insurers use credit information to price auto insurance policies,” Worters said. “Research shows that people who effectively manage their credit have fewer claims.”
Worters said consumers can maintain a good credit standing by paying their bills on time and keeping credit card balances low.