Tips and Tricks For Getting Low Cost Auto Insurance

Tips on How to Get Low Cost Car Insurance

By: Jon Boyd Barrett

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Searching for good, yet affordable car insurance can seem daunting, and it may be tempting to give in to the overpriced insurance companies and take the first offer you get. However, if you are well prepared and you have a plan, then not only will the process be fairly easy, but you will also be able find the cheapest car insurance available, and potentially save hundreds of dollars a year.

How Does Auto Insurance Work?

To be able to shop around for the best, low-cost auto insurance policy for your needs, it is important to understand the basics, i.e., what is required and what is optional.

Deductibles: Possibly the biggest factor that can determine the price of your auto coverage. A deductible is the amount you will pay in the case of an accident before the insurance company covers the remainder. For example, if you have a deductible of $1,000 and you get into an accident where the damage repairs comes to $2,000, you will have to pay $1,000 before the insurance company covers the rest.

Bodily Injury Liability: Compulsory in most states. If you get into an accident that is determined to be your fault, this will cover the costs of injuries to the victim.

Property Damage Liability: Compulsory in most states. Covers you in the case of you causing damage to someone else’s car and property.

Collision Coverage: Optional. Covers damage to your car in the event of an accident.

Personal Injury Protection: Optional in most states. Covers medical expenses for injuries incurred in an accident.

Comprehensive Coverage: Optional. Covers all other possible causes of damage to your car, including fire and theft.

Uninsured Motorist Coverage: Optional. Protects you if you are involved in an accident with an uninsured motorist.

Low Cost Auto Insurance Options

The cheapest option available to you is to purchase only what is legally required. This is usually the liability coverage; however, it varies from state to state. You may get a very cheap rate, but of course, you will not have any personal coverage.
If you have an old car that isn’t worth that much, it may not be worth buying any damage coverage for your vehicle.
Raising your deductible will reduce your rate, but be prepared to be able to pay it in the case of an accident. It may be a good idea to have some savings set aside, equal to the amount of the deductible.
If you have a car loan, you will generally be required to have full auto coverage.

Driver Discounts

Most car insurance companies will offer discounts. Among the different types of discount programs are:

Good driver discount (for those with a clean driving record).
Student auto insurance discount (for young drivers).
AAA member discount.
Senior citizen discount.

Another way to get a discounted rate is by purchasing a one year policy as opposed to a six month policy. Not only should the rate be a little cheaper, but you will also be protected from receiving an increase to your rate after 6 months.
Be sure to ask about these discounts as some auto insurance companies may be slow to point them out to you.

Combined Insurance

If you live in a household with multiple cars, it may be a good idea to have them all insured under the same auto insurance policy. This will reduce the cost dramatically, and in some cases, you may even be able to get two cars insured for the price of one.
Companies that offer home insurance as well auto insurance will also be able to provide you with a discounted rate if you combine them both on the same policy.

Anti-Theft Devices If you do not already have one, then installing an automatic anti-theft device will lower your insurance rates. Car insurance companies offer greater discounts for those with automatic anti-theft devices as opposed to manual, as often people will forget to turn on manual devices, leaving their vehicles vulnerable to thieves.
Different automatic devices include immobilizing devices, alarms, and lojacks. They are relatively cheap and well worth the investment. An electronic immobilizer, for example, will cost you around $50, and you could easily make that back with the reduced rate that the auto insurance company will give you for having it.

Good Credit Helps Get You Low Cost Auto Insurance

A lot of insurance companies will now check your credit rating in order to assess what auto coverage rate they will offer you. If you have good credit, you can use this to your advantage; however, if your credit is in bad shape, you may be better off going through an insurance company that does not make credit checks.

Defensive Driving Course

Some auto insurance companies offer further discounts to people who have completed a defensive driving course. Check to see if you can qualify for this, and if so, ask the insurance company or your state's insurance commissioner to find out where you can take the course. You may even be able to take an online course for as little as $10, just go to DefensiveDrivingUS.

Shop Around

Now that you know the differences in coverage and ways to get discounts on your auto insurance, it is time to shop around.
It is absolutely crucial to comparison shop, as rates can vary greatly from company to company for exactly the same coverage. There are some websites that will give you rates from many car insurance companies, simply by filling out one form. Two websites you can try are LowerRateQuotes or eQuoteCarinsurance.

It is also worthwhile to check rates through insurance agencies. Insurance agents can often get you even cheaper rates than you can find online. Get a list of local agencies through the yellow pages or an online directory, and begin calling for quotes. It is important to specify the exact auto coverage that you want, otherwise, you may get a seemingly great rate which turns out to cover very little.

Repeat Process

The final auto insurance reduction tip is to repeat everything that you have just learnt. The cost of auto coverage changes frequently. Over the course of six months or a year, there may be many changing factors that could earn you a cheaper policy. Unfortunately, most auto insurance companies will not tell you if you qualify for a cheaper rate, and so for this reason, it is important to ask for a new policy quote with your existing auto insurance company, or shop around at others at least once a year.

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