Reducing Your Car Insurance Premiums

Reducing Your Car Insurance Premiums

Insurance rates are extremely flexible and shift constantly, even within a single provider.  It is beneficial to monitor your provider's rates for any improvement in price or change in terms.  On top of that, there are a variety of ways to reduce your premium; thereby letting you better live that rock star lifestyle.

What You Drive

Your vehicle choice plays a major role in the resulting insurance premium.  Thinking about a sports car or SUV; you will be looking at much higher insurance premium.  Insurers keep track of all the claims made, along with industry-published figures to help them determine the break-even point for their policies.  This includes how much it costs to repair your vehicle, along with bodily injuries suffered and the cost for medical care.  The Highway Loss Data Institute (http://www.iihs.org/) provides a large variety of statistics related to each type of vehicle.  Take some time and look at their data; it may help you narrow down your choice of vehicle.

As the site shows, larger vehicles such as SUV's or trucks have much fewer injury claims, but often much higher collision costs.  The safety of a large vehicle comes at a fairly large sticker price upon purchase; along with higher insurer costs should you ever get into an accident.  As many SUV's now come with AWD or 4WD often, insurers will knock you again for the added costs to repair the systems.  If you can barely afford such a large car, the insurance may push you over the edge.

On the opposite end of the spectrum are the small, sporty cars (think Mitsubishi Evolution, Ford Focus SVT, Acura RSX, etc.).  Cars like these are often the smaller of the two vehicles involved in a collision, resulting in higher repair costs.  Additionally, the size causes many more physical injuries to the passengers within and will once again raise the insurance premium due to the larger associated medical costs.

So now, what doesn't eat your soul with insurance premiums?  We could all drive Volvos and Saabs and have no issues with insurance costs, but alas that is not the case.  Most "sensible" cars, as suggested by many publications, are good starting points for many insurance rates.  The cost of your insurance will increase with each new feature you add to your vehicle, such as increased horsepower, stereo, or aesthetics.  With the instant quotes that many insurance companies have available on their website, it is very easy to learn of the insurance premium prior to purchasing your car.

Who Is The Driver?

There are a number of personal factors that play a role in calculating your premium.  Your residence, whether in a major city or rural area, affects how much you pay.  Larger cities have a higher accident rate due to increased traffic and population density.  There is a distinct difference in cost between living in the city and living in a nearby suburb.

In addition, your past driving record influences your premium.  The more accidents and moving violations, the higher your premium will be. Insurance companies offer the lowest rates to drivers with clean records.

The final three influences upon your premium price are your age, your marital status and your sex.  Men often pay much higher premiums at a young age than women due to studies showing that men drive significantly more than women.  Single men tend to drive more (and faster), resulting in higher premiums than their married cohorts.  And finally, insurers profile drivers based on their gender.  Some states have begun prohibiting insurers from discriminating based on gender, but not all.

Ways To Improve Your Insurance Premium

As your car ages, unlike a fine wine, the worth reduces significantly.  Your collision coverage should follow suit.  What good is a $100,000 policy if flat out replacing your vehicle will only cost the insurance company $8000?

Avoid unnecessary tickets.  Stop at all the stop signs and don't blow through any yellow/almost-red lights.  The more violations you get, the greater your premium.

When your insurance policy runs out, whether it's every six months, yearly or bi-yearly, compare your renewal price with other companies as you may be overpaying.  The internet has made it abundantly easy to compare prices, so take advantage of it.

On your terms, the deductible for your collision and comprehensive insurance can be increased to lower your premium.  It will mean ponying up the cash for minor incidents, such as losing your mirror to a side-swipe or getting rear-ended slightly at a light.  The insurance company will cover the major accidents, and increasing your deductible from $100 to $1000 can make an incredible difference in the premium.

Check with your insurance agent to make sure you are receiving all the discounts available to you.  Often the insurance company will not advertise all of the discounts available, so don't be afraid to ask an agent or call the 1-800 number seen on the website.

Hopefully with a little luck, your new vehicle will be insured in a way your wallet doesn't shrink in size.  Insurance companies do try to weasel their way out of offering you cheap prices, but if you are diligent and vigilant, you'll be adequately insured at a semi-reasonable price.