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5 Ways To Save Money On Your Insurances


Picture this: you’re an 18-year-old from California and just got the keys to your brand-new sedan. As per state law, you’ll need to carry car insurance if you want to get around. Minimum coverage and a premium of around USD$ 500 should get you by.

Then again, you’re only 18; you just got your license two years ago. A year later, you crashed your family’s van and got slapped with your first DUI on top of a notebook’s worth of speeding tickets prior. Suddenly, that USD$500 premium jumped tenfold. 

Pondering whether to get insurance isn’t unusual. At one point in a person’s life, the thought causes sleepless nights and headaches. Despite state laws making car insurance mandatory, 14% of drivers in the U.S. are uninsured according to the Insurance Research Council. The money they have to shell out every month or year is just too much. And for some, they prefer to have faith in their driving skills.

The problem is that Murphy’s Law is a fact of life—you can be careful all you want but still cause an accident. Insurance, in general, was invented to catch you when you fall into these unexpected crises. If cost is the only thing keeping you from getting insured, there are several easy ways around that, such as:

1. Window Shopping

Don’t be too quick to jump on the bandwagon. The first step should always be to look around and get quotes from at least three different providers. Provide agents with basic information such as your license, your car’s VIN and mileage, and the extent of coverage you want. An ideal policy should cover as many bases as your desired policy allows.

More importantly, remember that the lowest bidder isn’t always the best. It won’t hurt to perform background checks on an insurance provider, reviews and all.

2. Increased Deductibles

Your deductible refers to the amount you’re willing to pay in an insured loss. The insurance agency will deduct this value from the insured loss amount; for example, a deductible of USD$500 for a claim worth USD$5,000 will get you USD$4,500.

The Insurance Information Institute crunched the numbers and found that doubling the deductible can reduce premiums by as much as 30%. After all, increasing the deductible is a sign of financial responsibility that appeals to providers. Regardless, never settle for a deductible you can’t afford when disaster strikes.

3. Special Policies

If the provider offers policies for special cases, consider taking a look at them. For instance, SR-22 policies provide sufficient coverage for motorists with records of severe traffic violations such as DUI. Knowing that you can fall back on something in case of emergencies is a relief.

Among the SR-22 policies that some insurance providers offer is non-owner SR-22. You can read more here, but the gist is that it works like an SR-22 only for those without a car of their own. It’s helpful in instances when you need to borrow someone’s ride for valid reasons like work.

4. Pay-As-You-Go Setups

Insurance providers determine premiums based on a person’s driving style and mileage. However, some offer pay-as-you-go plans, which charge holders premiums every time they use their vehicle. A telemetric device installed in your ride can record the vehicle’s mileage in real-time.

The setup can come as either full-fledged policies or as discounts to standard car insurance plans. To put it simply, the less you use your vehicle, the less your premium. To make the most out of a pay-as-you-go plan, keep your mileage under 10,000 miles in a year.

5. Maintaining Good Credit

Credit rating plays a huge role in determining your premium. People with high credit scores usually get the best rates as they demonstrate financial responsibility, making lenders feel more confident. They also enjoy better perks and rewards, sometimes even direct goodwill from the lenders.

Even if you have subpar credit, you can work your way to good credit. Every timely payment made builds up your reputation among lenders in different markets, not just in car insurance. It may take a long time, but receiving better insurance offers later will be worth it.

Conclusion

Don’t be discouraged by the cost of carrying car insurance—or any insurance for that matter. It’s better to have one and not use it than not have one when you need it the most. As Murphy’s Law states: “Anything that can go wrong will go wrong.”

By looking around and making the right decisions, even a full coverage policy won’t feel too much of a burden. With that said, hold your head high and get insured.