Connect with us
Advertisement

News

How to keep your car insurance costs low amid rate hikes

Published

on

Advertisement

Auto insurance rates will rise in the coming year, but motorists can follow these steps to keep their premiums low. (iStock)
Watch Free Movies and TV shows Apps

Advertisement

🎬📺 Free Movies and Free TV Shows! 🎭🎬

Recent data from the Bureau of Labor Statistics (BLS) shows that auto insurance rates have risen in recent months, following a decline during the COVID-19 pandemic.

Motor insurance rates rose 16.9% in May and the jump follows a 6.4% increase in April, according to the BLS data released on July 13. Amid these rate hikes, there are several expert-recommended tips you can follow to ensure you don’t overpay and to help you get cheap auto insurance.

To compare how much you pay for your auto insurance, it’s helpful to know the average cost of auto insurance. Currently, the average cost of insuring a mediumfull-coverage sedan was $1,245 in 2020, according to Andrew Latham, editor in chief at SuperMoney, a platform that connects consumers with certified personal financial advisors.

“Your best auto insurance rate is based on multiple factors, such as your age, the car you drive, your credit history, and where you live,” Latham said. “Therefore, the only reliable way to determine if you have a good auto insurance rate is to compare your current coverage with different carriers. Just make sure you’re comparing apples to apples and using the same coverage.”

Advertisement

If you are looking for a new car insurance policy, visit Credible where you can compare multiple auto insurance companies and quotes at once and see your personal rates.

STUDY FINDS A SURPRISE FACTOR IN CAR INSURANCE CALCULATION – AND OTHER FACTORS TO BE AWARE

When looking for ways to lower your auto insurance rates, here are four tips to keep in mind:

Advertisement
unnamed
Advertisement
  1. Compare multiple car insurers
  2. Think of your own risk
  3. Work on your credit score
  4. Be careful what you do to lower your rate

1. Compare multiple car insurers

Loyalty doesn’t pay when it comes to lowering your auto insurance rate, and shopping around to compare options can be a great way to lower your auto insurance premium.

“Most people who switch providers find better rates,” Latham said. “Low rates aren’t everything, though. While it’s smart to compare multiple quotes to find low premiums, you also want a carrier with fair and fast claims settlements and good customer service.”

You can search for affordable auto insurance in just a few minutes by visiting Credible. There you can fill in your basic information and coverage preferences to view offers from multiple auto insurance companies.

Advertisement

HOW DO YOU GET DISCOUNT ON CAR INSURANCE?

2. Think about your own risk

Opting for a higher deductible can be an easy way to significantly lower your monthly automatic payments. In fact, increasing your deductible from $500 to $1,000 can lower your insurance premium by 10%. Drivers can also drop other additional coverage options to lower their premium.

“Consider dropping extended and collision coverage if you have an older car,” Latham said. A good rule of thumb is to drop additional coverage (collision and extended) when your annual premium is 10% or more of the car’s Kelly Blue Book value. For example, if you pay $1,500 a year in auto insurance and your car is worth $10,000, you’ll probably need to drop extra coverage.”

Other perks that drivers can drop from their policy include coverage for medical payments and protection against personal injury. While these can be good in an accident, health insurance can already cover them. Also, drivers who have a second car or who can rely on public transport may want to waive the coverage of the rental fee. Often, the homeowner’s or even the renter’s insurance policy will also cover some of these extras.

3. Work on your credit score

Aside from a clean driving record, either by not having attributable accidents or by taking a defensive driving course, there are other records that come into play in determining your auto insurance premium. In some states, your credit score can help you get a better rate, so improving your credit score can work in your favor for auto insurance. This applies to every state except California, Hawaii, Maryland, Massachusetts, Michigan, Oregon and Utah, which prohibit or regulate the use of credit scores by auto insurance companies, Latham explained.

But it’s important to note that shopping for auto insurance doesn’t hurt your credit score, Latham said. Auto insurance companies use a soft application, which means the check will show up on your credit report, but it won’t affect your score.

Advertisement

To make sure you have the cheapest auto insurance policy for you, shop around and compare multiple insurance companies to find the best rate. You can visit Credible and compare multiple providers at once and review your potential auto insurance policy without impacting your credit score.

HOW TO PREPARE FOR PANDEMIC CAR INSURANCE HIKES?

4. Be careful what you do to lower your rate

While there are several ways to get discounts on auto insurance, there are areas where it’s unwise to cut back on your coverage — such as bodily injury liability — because it can be harmful in the long run.

“Don’t skimp on liability coverage,” Latham said. Drivers who don’t have as many assets to protect may be tempted to drop liability coverage altogether. Keep in mind, however, that your pay could be garnished if you cause an accident. I recommend a minimum of $100K per person to, $100K for property damage and $300K per incident.”

enumerating

There are several ways to save on your auto insurance premium, including comparing multiple auto insurance quotes, increasing your credit score, and reducing unnecessary extras. Often, veterans and military members can also get a policy discount, so be sure to ask your provider. In addition, teen drivers typically pay more for their insurance, but can get special offers such as a good student discount.

To see what kind of auto insurance discounts are available to you, get started today by visiting Credible to get your free auto insurance quotes.

Advertisement

Do you have a financial question, but don’t know who to ask it? Email The Credible Money Expert at: [email protected] and your question can be answered by Credible in our Money Expert column.

The post How to keep your car insurance costs low amid rate hikes appeared first on Notesradar.

Advertisement
Advertisement

Trending