The reports list many different expense categories and average amounts, but they are still valid indicators of how expensive car insurance can be. It gets worse when the driver falls into the high-risk category. A high-risk driver is one who tends to file claims more frequently than the average person due to a history of recurring involvement in accidents, lack of driving experience, visual impairment, and poor credit rating. Auto insurance companies view high-risk drivers as undesirable customers. More claims mean more payments, and this is bad for businesses. However, there are many different ways to lower your auto insurance premium, whether the driver is high-risk or low-risk.
Understand the need for auto coverage
Auto insurance provides financial protection through coverage. There is a specific type of coverage for a different set of hazards, for example, bodily injury and property damage, collision, comprehensive, personal injury protection, and roadside assistance. Some of them are required by law, while others are optional. Mandatory coverage is unavoidable because all drivers must be able to present valid proof of insurance when requested by a police officer. Failure to take the test is punishable by fines, driver’s license suspension, and imprisonment.
Optional coverage can be waived on the auto insurance policy. It’s better to understand what each type of coverage does to help you make the right decision. For example, an inexpensive old car that wouldn’t cost too much to replace doesn’t need comprehensive insurance. After some careful calculations, the coverage premium and deductible can cost more than the value of the car. In contrast, a new car worth more than ten times the premium can always use both Comprehensive and Collision.
Regardless of the car model, make sure all types of policy coverage are necessary because omitting useless coverage can save a lot of money. A conversation with an independent agent can help anyone determine the right insurance for their needs.
Reduce the premium but not the coverage
Not all drivers can afford the most comprehensive insurance policy or need the same types of coverage. An insurance policy that consists of just the state’s minimum coverage requirement costs less than those with some optional protections, but it doesn’t mean that everyone should cut coverage to save money. One of the easiest ways to lower your premiums without skipping coverage is to take advantage of insurance discounts. The auto insurance premium may seem expensive, but cutting multiple discounts cuts the cost a good deal. There are three basic types of insurance discounts: Vehicle discounts, driver discounts and policy discounts.
1. Vehicle discounts
The premium reduction is available to those whose vehicles meet and exceed the requirements of safety standards. Vehicles with a passive restraint and anti-theft system are the minimum requirements to be eligible. Some newer vehicles come with these safety features as standard options, so there is no need to purchase and install replacement parts. Other safety features include VIN, antilock brakes, and stability control. All of those additions prevent injuries and accidents on the road; Auto insurance companies appreciate and reward drivers’ efforts to stay safe. In case the supplier does not offer the discounts, consumers must request it.
2. Discounts for drivers
Eligibility for driver discounts depends on driver profiles. It has nothing to do with the safety features of the vehicle. Some requirements for driver discounts are as follows:
· Defensive Driving Course Completion: The course teaches drivers to drive safely and avoid getting involved in accidents all the time of road conditions.
· Safe driver: After a period without tickets or without accidents, some insurance providers reward drivers with discounts. The period may be different from one provider to another.
· Low mileage: If the consumer allows it, an insurance company can install a mileage detector on the vehicle. Low mileage drivers mean they spend less time on the road and therefore a low risk of accidents.
· Loyal customer: a policyholder who stays with the same company for multiple periods may be eligible for this discount.
· Good student: The teen driver who gets good grades in school or college is also eligible for the premium reduction.
When life circumstances change, a driver who was previously ineligible for discounts can request reductions as long as they can show valid proof of eligibility.
3. Policy discounts
Unlike driver and vehicle discounts, eligibility for policy discounts depends on how the customer purchases the insurance. Common eligibility requirements include:
· Full payment: some companies offer multiple payment options. A customer who pays full cost up front deserves a price reduction.
· Multi-car: a customer who has two or more cars on the same policy is also eligible for a lower price.