Car insurance premiums are partly based on factors under your control and partly on factors outside your control. It is pointless getting stressed about the latter, but knowing which factors under your influence affect premiums can help you change your behaviour and secure cheaper insurance. There are four tips for reducing your car insurance premiums:
Tip 1 – Drive Better
Many people think that having car insurance gives them the liberty to drive recklessly because they will be covered for damages if there is an accident. This kind of attitude to driving is not only dangerous it is also very costly. Auto insurance companies give good drivers better premiums and some even refund clients who go without claiming for a couple of years. Traffic offences also factor into how much insurers charge you. If you are caught for driving under the influence of alcohol and are convicted, you are guaranteed to pay more for your car insurance than other drivers for the rest of your life. It is highly recommended that young drivers take a defensive driving course after getting their license. Young male drivers are seen as very high risk drivers by insurance companies and are either given very high premiums or a turned down altogether. Some insurance companies will give drivers discounted premiums for having completed advanced driving courses.
Tip 2 – Increase your deductible
Your deductible, also referred to as your excess, is the amount of money you need to pay for losses before your insurance policy starts paying out. By choosing a high deductible you are taking more risk onto yourself. Insurance companies will reduce your premium if you increase your deductible and likewise increase your premium if you opt for a lower deductible. If you are a good driver and you have some money saved that could cover a higher deductible then increasing the deductible is a good option. The amount of money that you save on your premiums could equal your deductible after a year or two.
Tip 3 – Buy a less powerful car
Cars with big engines that can reach higher speeds than an average mass produced vehicle are deemed high risk by insurance companies. There are two main reasons for this. The first is that cars that can go very fast tend to be driven very fast. Fast cars have a higher risk of being in and causing accidents so insurers make you pay more for insuring these types of vehicles. The second reason is that most cars with powerful engines are more expensive and have a higher risk of being targeted by car thieves. In this case your premiums are higher not because of your behaviour but because of the behaviour of criminals.
Tip 4 – Group your policies together
Insurance companies have a lot of costs that exclude the payment of claims made by their clients. A large chunk of their expenses is due to administrative and marketing costs. These costs are included in the premiums policy holders pay. By taking out a car insurance policy with one insurance company, a home insurance policy with another and a life insurance policy with yet another means that you will be paying for the administration and marketing costs of three separate companies. By grouping your policies together and using only one insurance company you will be saving money for the insurance company and they will reward this by giving you lower premiums.