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How To Obtain Low Cost Auto Insurance

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  • How To Obtain Low Cost Auto Insurance

    If you are like most people, you have probably stayed with the same auto insurance company since you first purchased your vehicle. Even through the years when you needed to update your policy, you did so just to let them know you had a new model vehicle or added another driver to the policy. If you haven't compared your auto insurance rates in awhile, it's time to take out that policy and do some comparison shopping. Even if you are perfectly satisfied with your current insurer, it's likely you can find a low cost auto insurance company and reduce your current rates by hundreds of dollars a year.

    The first step to saving is to find your current auto insurance policy. In order to be able to obtain low cost auto insurance, it's necessary to know what your current insurance rates are and for what types of coverage you are paying. If you have no idea where your insurance policy is, call your insurance agent and have them send you a copy.

    Once you have your current policy in hand, you have all the information you need to do a quick Internet comparison search with a low cost auto insurance site or comparative site. Input the exact same coverage that you are carrying with your current policy to see if you can get a better rate simply by changing to a low cost auto insurance company. If you get results that beat the current rates you are paying, you have put yourself in the driver's seat, so to speak. Even if they don't, there are still plenty of other opportunities to reduce your current rates.

    Before you even begin discussing possible low cost auto insurance rates for which you may qualify, your first step should be to take a good, hard look at your current deductible. The deductible is the portion you have to pay out of your own pocket before the insurance company will begin paying. For example, if you have a $500 collision deductible and you put a $200 dent in the side of your vehicle, you have to pay the entire amount since it is less than your deductible. If you get into an accident which does $1000 worth of damage to the vehicle, you would pay $500 and the auto insurance company would pay $500.

    While the above example may have you saying that you want a $0 deductible, the lower your deductible is, the more your insurance payment will be. While having a low deductible may seem like the best plan, you need to take a close look at what the low deductible will actually cost you. For example, say that a low cost auto insurance company has told you that increasing your deductible from $250 to $500 would save you $100 a year on your insurance. This would mean that keeping the $250 deductible is the same as paying $100 for $250 ($500 - $250 = $250) in coverage per year. When you look at it from this perspective, a low deductible makes little financial sense.

    Your best strategy is to raise your deductible as high as possible with the knowledge that if you do have an accident, you'll be able to cover the deductible without putting yourself into any type of financial hardship. It may even make sense to drop the collision and comprehensive coverage all together if you own an older vehicle that is worth less than several thousand dollars. This is because any claim you are likely to make will not substantially exceed the combination of your auto insurance costs and deductible amounts.

    Once you have figured out the deductible that is right for you, you can begin to see if there are other areas where you can reduce you current insurance payments. Low cost auto insurance is like any other business. Competition is tough and keeping good customers is far more economical than trying to find new ones. This means your agent will do his or her best to provide low rates to keep you if you look like you may be ready to move to another competitor.

    While you are most likely aware of the main discounts which are available to you, low cost auto insurance companies usually have a wide variety of discounts, many of which you may not be aware. Here are a few of the discounts that many of these companies offer:

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    Coordinated Benefits: If you have medical or work loss benefits from your employer, you can choose to coordinate medical and work loss. What this basically means is that your primary insurance in these areas is covered by your work policy and the auto insurance in these areas only kicks in when the work policy benefits run out. Since this makes it much more likely that the low cost auto insurance will not have to pay out for medical costs in the event of an accident, coordination your benefits will dramatically lower your rates in this area.

    Drive Safely: Many low cost auto insurance companies offer a discount to policyholders who haven't made an auto insurance claim in the last 3 to 5 years.

    Defensive Driving Course: While many view a defensive driving course as something for driver's who are young or with poor driving records, they can be completed by anyone. If taken within the last three years, they will likely reduce your auto insurance costs.

    Drivers Education Training: If someone in your family is young and just beginning to drive, they may qualify for a discount if they have completed a driver's education training class.

    Anti-Theft Device: If you have certain anti-theft devices for your vehicle, you may qualify for a discount on the comprehensive and electronic equipment portions of your auto insurance. These systems usually have to be "passive" meaning that the device arms itself and requires no intervention on your part such as inputting a code each time.

    Auto Recovery Device: Vehicle recovery devices (often referred to as a Lo-Jack), activate when your vehicle is stolen making it possible for police to track the location of the vehicle. If combined with anti-theft devices, you can increase the discount on the comprehensive portion of you auto insurance.

    Wear Your Seat Belt: Many low cost auto insurance companies will reduce the cost of the personal protection portion of your auto insurance if you sign a form stating that you wear your seat belt in compliance with the law when driving your vehicle.

    Passive Restraint Systems: Passive restraint systems such as airbags or automatic seat belts can lower the bodily injury portion of your auto insurance. Also auto safety equipment like anti-lock brakes will often provide a discount.

    Multiple Vehicle Discount: If you have more than one vehicle in your family and you insure all the additional vehicles with the same low cost auto insurance company, you will likely receive a discount.

    Multiple Product Discount: Most insurance companies are large entities and provide a wide range of other insurance coverage in addition to low cost auto insurance. If you use the same company to insure multiple areas in addition to your vehicles, you'll usually qualify for a discount.

    Policy Renewal Discounts: If you have been with the same low cost auto insurance company for a number of years and have not been any moving violations or at-fault losses during the previous policy period, you may qualify for this discount.

    New Business / Transfer Discount: If you were insured with another auto insurance company and are switching to a new company on your own accord, you may qualify for this discount if your driving record has been clean for the last few years.

    Senior Citizen Discount: Auto insurance often gets lower with age because the elderly don't drive as aggressively as those who are younger. If you are 65 years or older, you may qualify for a discount.

    Public Transportation / Carpool: If you travel to and from work by public transportation or by carpool, you may be entitled to a discount on your auto insurance.

    Low Mileage: If the mileage you drive your vehicle yearly is lower than the average, then you will likely qualify for a discount.

    Good Student: If a young person on a policy is still in school, their good grades (usually 3.0 or better) can qualify them for an auto insurance discount.

    Military Discount: Some low cost auto insurance companies offer discounts to members of the US military and military reserves.

    Occupation Discount: Low cost auto insurance companies know which occupations are a better risk than other occupations. For example, studies show that engineers have a lower accident risk than average and may qualify for a discount on their auto insurance. Different companies offer discounts for different occupations, so ask specifically which occupations, if any, qualify for a discount.

    Professional Organizations & Clubs: Being a member of certain professional organizations such as AAA can mean a discount on your auto insurance.

    Improve Your Credit: Your credit matters when it comes to your auto insurance premiums. Why? Because if your credit is good, you are less likely to commit insurance fraud to try and get money. Improve your credit rating and you may be entitled to a discount on your auto insurance.
    Last edited by jeffrey; 07-16-2012, 06:22 AM.

  • #2
    Re: How To Obtain Low Cost Auto Insurance

    I was recently shopping around for insurance and one place asked if and when I will be turning 25. I told him that I'd be 25 in 4 1/2 months. He said that it was pretty close and he can usually do it for 3 months in advance, but he would try and then call me back. He called back less than 20 minutes later and was so excited. He was able to insure me as if I was 25 and there wouldn't be a problem. As a result I save over $200. It definately was worth it to call before I turned 25. I told a few other friends and they're going to try and get a rate reduction a few months before they're 25.


    • #3
      If you live in California try their Low Cost Automobile Insurance Program


      • #4
        Hey feffrey, did you right this? I see that it has been here a while, but it's still one the most, if not the most, detailed guides to auto insurance I've read, and I've read many.


        • #5
          Originally posted by Rick01 View Post
          Hey feffrey, did you right this? I see that it has been here a while, but it's still one the most, if not the most, detailed guides to auto insurance I've read, and I've read many.
          I'll second that! Great stuff, thanks.



          • #6
            There are so many changes within the insurance companies that it makes sense to revisit your policy. The tips were great about the deductibles and I'm wondering if some of the localities offer free driving defensive classes in some of the high schools. That would be a savings as well. You do have to check with your company to see if they will accept and lower your rates if you go to one of these classes, otherwise you're wasting your time and money.


            • #7
              Great thread,

              Having a car is one of the many great things in life. The ability to just jump in your car and go and do whatever you want is a very liberating feeling. However, what is not so fun about owning a car is paying for it, specifically paying car insurance. It’s one of those things that is a necessity when owning a car, but something that can affect how much money you have in your wallet at the end of the month. However there are ways to find cheap auto insurance.

              One of the best things you can do when looking for car insurance is to shop around. Shopping around will enable you to be able to compare and contrast all the different offers and companies around. It’s important to know that even though different companies offer the same coverage, the price can vary even buy a few hundred dollars depending on who you look at. Car insurance comparisons are extremely helpful.
              Last edited by sweeps; 07-03-2008, 03:20 AM.


              • #8
                Good Car Insurance

                Hey Jeffrey—thanks so much for your article above. You have a good, clear writing style and the information was very helpful. I’ve been shopping around for a good car insurance. And you’re right - I wasn’t aware of many of the discounts that you mention. I’ll keep it in mind as I shop around.


                • #9
                  Car Insurance Policy

                  I want to change my car insurance policy. I haven’t reviewed it for a long time. Mine keeps going up every year. I figure there must be a better deal than what I’ve got. I drive a car pool every day so according to Jeffrey I probably should get a discount, on my car insurance policy, right Jeffrey?


                  • #10
                    Thanks for this informative post!

                    Thank you for this, it is one of the most detailed posts I have seen about how you can lower your car insurance rates. Keep in mind, however that the cheapest deals aren't always the best deals. Look at these factors when choosing which car insurance company you will sign up with:
                    1. great customer support - this will become important when you are in the middle of an emergency
                    2. financial stability - so you are sure that the company will be able to cover your expenses in the case of accidents
                    3. is the company recognized in the state you are in? - if it isn't then it's like driving without car insurance


                    • #11
                      indeed, cheapest rate only make sense when all other factors are the same ....


                      • #12
                        Really good information

                        Thanks a lot for the efforts to put together this awesome information.
                        A car owner since many years I always suffered from paying more than I had if I had been informed better.
                        My experience is that I really have to gain as much knowledge as possible because I have not always been treated correctly by auto insurances.
                        Even if some details may have changed since you made this post I am sure it helps not only me but many of your readers.
                        Glad to be here.



                        • #13
                          I have to agree with you, I've payed too much for auto insurance for years too but now I can get a better rate just by doing a bit of comparison shopping. Thanks!

                          Originally posted by tamaralubenski View Post
                          Thanks a lot for the efforts to put together this awesome information.
                          A car owner since many years I always suffered from paying more than I had if I had been informed better.
                          My experience is that I really have to gain as much knowledge as possible because I have not always been treated correctly by auto insurances.
                          Even if some details may have changed since you made this post I am sure it helps not only me but many of your readers.
                          Glad to be here.



                          • #14
                            When it comes to auto insurance, I know that you get a reduced rate when you turn 21 and then 25, get married, pass a safety driving class. What other things help get you a reduced rate?


                            • #15
                              Compare and Research

                              I always believe one has to compare quotes and always go through the fine print.