Did you know that there are actually five different types of car insurance? There’s liability coverage, collision coverage, personal injury protection, comprehensive coverage, and uninsured motorist protection.
Every single one of these types of car insurance is important. However, the common concern of the average American is “how can I save as much money as possible?”.
The most important thing to do is to understand the ways you can save. From there, it’s all about pursuing the methods of saving that make the most sense for your situation.
See below for an in-depth guide on how to save money on the different types of car insurance.
1. Do Some Research
The modern-day American spends very little time thinking about the car insurance that they purchase. In fact, they spend more time thinking through which streaming services they’ll pay for than weigh out the details of their car insurance coverage.
That’s like stepping on a car dealership’s lot and signing the contract to buy the very first car you saw. It’s probably not going to end well and it certainly won’t save you money.
Always take the time to shop around and do a little research whenever you find yourself looking for auto insurance. Most car insurance providers will give you online quotes, so it just takes a few minutes for you to get an estimate.
As you shop around at the different offers, be sure to ask yourself some questions:
- Does this cover other drivers of my vehicle, or just me?
- Is the deductible a reasonable rate?
- Do I have all of the coverage that I need in an emergency?
- Will this protect me and my family from a financial setback?
- Is the monthly premium a reasonable rate for me to pay?
- Are there any discounts to lower the rates? (more on that below)
2. Look for Discounts
Too many people purchase car insurance without even inquiring about discounts. By taking a few extra minutes to ask and reach out about discounts, you can save yourself hundreds of dollars off the total of your car insurance cost.
In fact, many incredible discounts can help you save. See below for a list of the major discounts that are relatively universal:
- Safe Driver Discount– Given to anyone that has a driving record without any at-fault accidents or tickets for moving violations in the last 3 years.
- Good Student Discount– As the name would imply, this is given to the high school and college students that have a 3.0 GPA or higher in their coursework. You have to be age 25 or younger. Meant to help parents with kids who are still under their coverage.
- Bundle Coverage– A type of customer loyalty discount. This is given to anyone who has multiple types of insurance with one provider. For example, you can bundle your car insurance and home insurance.
- Multi-Car Discount– A discount is given to those that have multiple cars on one car insurance policy.
- Loyalty Discount– Increased discounts the longer that you keep insurance with one particular provider. Typically kicks in after the first year or two, with increased discounts every year after.
3. Increase Your Deductible
No matter what type of insurance you have, there will always be a deductible that you and your insurance provider agree upon.
That deductible is the amount that you agree to pay out of pocket before your provider starts to cover additional expenses.
For example, say you agree to a $2,000 deductible. Then, you get in a car accident and the cost of repairs is going to be around $5,000 in total. You would then pay $2,000 towards those repairs out of your own pocket, then your provider would cover the remaining $3,000.
Believe it or not, those deductible amounts can be negotiated. So—using the example above— if you were to raise that deductible from $2,000 to $3,000, it will lower the monthly premium that you’re paying.
4. Improve Your Credit Score
Insurance providers use credit scores as a primary indicator when you initially ask for a quote on coverage. In their eyes, those with a poor credit score should be considered more of a risk to insure.
Fortunately, there are many ways that you can improve your credit score quite quickly. Here are a few ways to start down that path:
- Pay off your debt
- Cut the credit cards
- Pay your monthly bills on time.
- Read your credit report and dispute any inaccuracies (happens more frequently than you might think)
- Pay off credit card debt
5. Opt to Drive Used Cars
You’d be shocked at the amount that you can save by purchasing a used car instead of a new one. Coincidentally, you’ll also cost yourself less depreciation once you drive it off of the lot.
For those of you that drive older cars, you might be able to reduce your insurance coverage and, thus, save yourself money.
Quite frankly, you might be paying for more comprehensive coverage than you need on an older car. No matter how young or new your car is, always check the Kelley Blue Book value online and make sure your coverage is no more or less than what’s necessary.
Save on the Different Types of Car Insurance With These Tips
Now that you have seen how to save on the different types of car insurance coverages, be sure to use this advice right away.
First, make sure you have the right amount of coverage. From there, be sure to adjust the deductible to get a much friendlier monthly payment.
Please be sure to browse our website for more articles on saving on car insurance, as well as many other helpful topics that you will love.
