As per statistics, many people dread the premium date of their car insurance. They often treat it as a liability that is mandated to them. This is normally the case up until one has been in an accident. If you understand auto insurance, you will appreciate that your insurance provider is there to back you whenever there is an eventuality and an accident happens. Unless one comprehends the fact that the need for insurance is not just a legal requirement but a protective shield that one must carry to cushion against the uncontrollable, one will feel that insurance companies are making money off them.
In reality, insurance is a risk management strategy that helps us claim the coverage we avail so that our out-of-pocket expenses will be less. It avoids a dent in the financial health of a person when there is an accident. Also, there are several affordable auto insurance options that will reduce the premium costs and bring them down to manageable levels. Although car insurance is perceived by many as an inevitable expense, the inflationary impact causes a significant burden.
In recent times, the average cost of insurance of comprehensive full coverage has increased by a sizable margin. All hope is not lost as it is still workable to find affordable car insurance coverage with little research and some savvy hacks. For this change to be effective, one has to understand the coverage requirements, take advantage of product discounts, negotiate, consider alternative providers, and include self-insurance as part of the package. Here are some steps that you can do to keep the insurance costs lower:
Renew Before Lapse Date
When your insurance policy is about to expire, you have to set reminders to renew it before the expiry date. If you renew your policy after it lapses, you risk staying uninsured for a few days. During this time you cannot drive your car and if there is any theft or damage in its stationary position owing to something falling on the vehicle, the damages will not be covered by the insurance company.
Additionally, the premium post renewal after the policy has lapsed is higher. Generally, there is a 10-12% price hike for insurance taken after the lapse date. You even run the risk of being classified as a high-risk driver which automatically increases your insurance cost for policies from other companies.
Safe Driver Discounts
Insurance companies pass some benefits in the form of discounts to the customers to reduce the risk of accidents by practicing defensive driving. Safe or Good drivers discount is available to all the people who drive within speed limits, service and maintain their vehicles regularly, and there is no record of any accidents in a given period. This discount is of considerable value and must be availed if you have a clean driving record.
Installing a telematics device enables an insurance company to track the driving habits of its customers. By using a telematic device you can get a discount for your car insurance. Besides this device helps you stay in check as a safe driver so that you don’t escalate your insurance costs.
More Deductible Equals Less Premium
If you can afford a higher deductible, then it is recommended to go for it. Imagine driving a car for a year with a low deductible and without any incident. You would have paid very high premiums for the same. If you are a safe driver, live in a decent neighborhood that has a low crime rate, and your car is usually parked in its spot, then depending on your financial ability, increasing the deductible is a better idea. Increasing the deductible by five hundred dollars will decrease the premium by twenty-five percent.
Lower Coverage For Old Cars
Vehicles are depreciating assets with their value decreasing with every bygone year. If you own an old car that has less resale value, then it is good practice to lower the coverage for collision and comprehensive features of auto insurance. Instead of paying a higher premium for more coverage, you can save the amount and invest in an asset class that can be used to pitch in for the replacement cost of the new vehicle. Paying higher premiums for old cars is sometimes a double whammy as the claims may be rejected due to low maintenance. However, it is known that beyond a certain tipping point, old cars cannot be serviced to mint conditions.
Change Car
Instead of paying higher premiums for an old car with a safety risk, buying a new car with advanced driver assist systems, cruise control, multiple airbags, blind spot monitoring, and lane departure warnings will help in driving a set of wheels that will be more fuel efficient and reduce your auto insurance costs.
Fewer Modifications
When you make any modifications to the car the insurance provider has to know about the changes. If you do keep them in the loop, you risk not getting your claims approved. If you don’t want the cost of insurance premiums to go up, then you should inform the insurance provider as not all modifications are considered good for your car. If the modifications enhance the safety of the car like installing a telematic device, chances are that premiums will be lower. The increased risk of using aftermarket parts will increase the auto insurance premiums. The new premium varies based on the risk underwriters.
Conclusion:
Owning a car is a necessity and driving a set of wheels on the roads while practicing safe driving is our responsibility. However, not everyone thinks alike and is involved in irresponsible driving, risking the lives of other commuters. Car insurance is required to file a third-party claim when you are not at fault and the opponent is a mistake owing to rash or negligent driving. Your insurance provider steps in and recovers the damages from the third party’s insurance provider to cover the expenses for damages to your car and medical expenses if you have been hit while in the car. Don’t stay uninsured and get yourself one right away!