9 ways in which you can cut costs on your car insurance

September 14, 2020

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RHI Agency Team

9 ways in which you can cut costs on your car insurance

America is one of the busiest countries in the world in terms of road traffic and has about 280 million vehicles on the roads. In the year 2018 alone, about 12 million crashes were reported in the United States alone. All these data point towards the need to have motor insurance or car insurance in the country.

Car insurance or auto insurance can be defined as an official contract between the insurance company and the owner of the vehicle that protects the owner against the financial losses they may encounter due to theft or an accident. This financial protection is offered in exchange for the premiums paid by the owner.

Normally car insurance can cost 3 to 4 percent of the cost of the vehicle during the first year which then slowly can come down to about 1 to 2 percent by the fifth year. Even then the premium amounts to a large cost annually and ways to reduce it must be explored.

Ways in which the insurance cost can be reduced

There are many way ways in which the total costs of car insurance can be reduced if we are careful. Let’s discuss some of the easy in which this can be done.

A.    Choose a good and safe car

The insurance amount you will have to pay mainly depends on the car you own. So if you are planning to buy a new car make sure that you compare the insurance costs. The total cost of the car, the price to repair, and its safety all play a role in calculating the insurance amount. A safer vehicle means lesser insurance costs.

B.     Opt for higher deductibles

Deductibles are the amount you pay before your insurance policy becomes active. By opting to pay higher deductibles your insurance costs can be lowered substantially. For example, in the US, if you increase your deductible from $200 to $600, your comprehensive and collision coverage cost can be reduced by 15 to 35 percent. But make sure that you don’t increase your deductible to an extent where your insurance coverage becomes useless.

Note: The total amounts, decrease and increase in premiums, etc. may differ according to the state you live in and the insurance agency you choose.   

C.     Buy multiple insurances at the same time

Many insurance agencies will give you special offers and discounts if you are in to buy more than one insurance policy from them. For example, you can buy homeowners and vehicle insurance at the same time to get reductions. Make sure you compare the quotes offered by different agencies before option one.

If you are not much aware of the prices and the benefits of car insurance, or if you consider comparing quotes a headache, you can approach RH Insurance agency, as we are one of the best insurance companies in America. We have 20 different insurance companies under our shade and is popular among people for the topmost service we provide to our customers.

D.    Maintaining a good credit score

Most insurance companies take the credit score of the person into account while calculating the premium amounts. A bad credit score can often lead to higher premiums as these insurance companies consider people with a bad credit score are more likely to file claims.

The credit score can be effectively managed by not obtaining unnecessary credit, paying bills on time, and keeping the credit balances to lower amounts.

E.     Low mileage discounts

The lesser you drive, the lesser is the risk. So some insurance companies provide discounts to the drivers who have driven lesser miles than the average miles per year mentioned in the policy. Make sure that you take advantage of this discount if you are eligible for it.

F.     Avoid monthly payments

Many insurance companies offer discounts for a whole or yearly payment compared to monthly payments. So it is always recommended to pay a whole amount and avail the discount rather than pay in small amounts. This reduction will add to your savings

G.    Don’t claim for small amounts

It is recommended not to claim the insurance amount for small damages that can be repaired by the local mechanic for low costs. In such a case where the insurance is not claimed for an entire year, the policyholder will be entitled to NCB (Non-claim bonus).

Note: Choose not to claim the insurance amount only if the NCB is much higher than the damage costs you will be paying from your pocket.

H.    Adding safety components to your vehicle

A car is like moving home for many people. Many people spend more time in their cars than in their homes. So it is important to install safety tools in your car. Buying an anti-theft alarm, a steering lock or a gear lock can help to reduce your yearly premium costs by about 5 percent. 

Conclusion

In the US, car insurance is mandatory by law in all 50 states. Auto insurance is bought in order to protect your vehicle from theft and other damages that can happen due to an accident, fire, floods, etc.

The different ways to reduce premium amounts may differ according to the insurance agency your approach. Make sure that you are informed about all the benefits, offers, and discounts on the car insurance policy offered by the Insurance agencies.

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