September 14, 2009

How You Can Keep Your Auto Insurance Premium Rates Low

Keeping auto insurance premiums low when the insurance industry is facing more fraud and natural disaster – and therefore more claims – is a challenge many grapple with every year. Whether you’re simply shopping for the best deal available or need to save money wherever you can, you can keep your auto insurance rates affordable by following a few simple guidelines.

First and most importantly, drive as safely and as little as possible. Customers with clean driving records always pay less for auto insurance than those with histories of traffic violations and accidents. Offering auto insurance premiums to safe drivers is less expensive for insurance companies, as the likelihood of having to pay claims decreases. Additionally, the more often you drive, the higher the chance you will be involved in an accident. Thus, the more miles you put on your car every year, the higher your premium will be. Consider walking, biking, carpooling or taking public transportation to and from work to keep your auto insurance rates down. Second, shop around frequently. There are several online quote comparison tools you can use to accurately compare prices of several auto insurance companies. If you want to ensure that you are paying the lowest possible premiums, do a price comparison three to four times per year.

Third, ask for discounts. Nearly every auto insurance company offers a good student discount, a senior citizen discount, a defensive driving course discount and a loyalty discount. If you don’t currently qualify, consider what changes you might make that could increase your eligibility. Fourth, keep your credit report clean. Since statistics show that people with lower credit scores traditionally file more insurance claims, many companies use a driver’s credit score to help determine their monthly premiums. Increase your credit score by paying bills on time, keeping credit card balances low, and paying off debt.

Fifth, consider lowering your coverage to include only what you truly need. While you are legally obligated to meet your state’s auto insurance coverage requirements, you have many choices about the amount of coverage you purchase. Though more insurance is always the safer choice, full coverage is often cost-prohibitive. Sixth, be aware that the type of vehicle you drive heavily influences your premiums. If you drive an older car that costs less to fix than a new, luxury model, your premiums will be lower. If your car has certain safety features, like electronic stability control or an anti-lock brake system, you are likely to pay lower rates. Before you make an auto purchase, it’s a good idea to contact your insurer and determine which makes and models will keep your premiums low.

Overall, follow these guidelines when it comes to auto insurance and you’re likely to save money in the long run.