How Can You Save Money On Auto Insurance?

24 November 2014

Robin Wells

There are several options available when you need to find auto insurance. The insurance coverage you choose will largely depend upon your individual needs and the amount you can afford to pay in premiums. Different factors must be considered in the purchase of auto insurance.

Buying auto insurance

When choosing an auto insurance policy, you must purchase a policy that meets the your state's minimum requirements. Insurance companies in each state are aware of that state's particular insurance laws and will design your auto policy around the basic requirements. You may also be required to purchase collision insurance if you are financing a car, to protect the lender's investment in your vehicle.

The price of your auto insurance policy will be determined by these factors:

• Your driving record. If you are a high risk driver, you will pay higher premiums.
• Your insurance history. Generally, if you haven't been insured with a standard insurance company for the previous 90 days before applying for insurance, you can only buy a sub-standard higher risk policy. These are more expensive, and apply to both new drivers and those who have let their previous insurance coverage lapse. After one year, you can apply for standard coverage if your driving record is clean and you have no insurance claims. 
• Your place of residence. If you live in a large city, where many insurance claims are paid out by insurers, your insurance costs may be double those of drivers who live in suburban or rural areas.
• The age of the driver. Drivers under 25 years old will pay higher premiums than older drivers. It is beneficial for a beginning driver to be insured as a secondary driver on a parent's policy if possible. This will provide for a substantially lower price for insurance for the younger driver.

How can you save money on auto insurance?

Although your insurance costs may be affected by these factors, you can still save money by getting price quotes from different insurance companies. Many states offer consumer guides on buying insurance and offer comparisons of different insurance companies operating in their state.

You can also get different discounts for individual insurance companies. Consider the following options :

• Multi-policy discounts when you insure both your home and auto with the same insurer.
• Multi-car discounts are available when you insure more than one vehicle.
• You may choose a higher deductible, which is the amount you pay out of pocket when an accident occurs. A higher deductible lowers the cost of insurance.
• You can pay for minor damage to your vehicle with cash instead of filing a claim with your insurance company. Many claims, however minor, will substantially raise your insurance rates.

There are other savings offered by individual insurance companies. Shop around until you get the best price. Click here for more information.

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