[The following is a guest post on behalf of Cheap Car Insurance]
One of the most frequent mistakes car owners make is overpaying for insurance coverage. There are several reasons that people don’t save money on car insurance. Here are some of the most common:
5 Reasons You Do Not Save Money On Car Insurance
Buying Too Quickly
Often, people don’t even think about looking for car insurance until the last moment. Then, they are in a rush to get coverage, and fail to shop around. Taking the time to research can help save money on car insurance.
Buying Only Name Brands
Sometimes, people think that only the big name insurance companies are reliable. This is not true. Most states regulate insurance companies closely. If a company is licensed to do business in your state, it has passed the state’s requirements (this is similar to finding a gas safe engineer).
Sometimes the lesser-known companies offer great coverage and still allow you to save money on car insurance.
Not Asking For Discounts
Most insurance companies offer discounts for various reasons. In many cases, you can get discounts for being a homeowner, or a safe driver. Some companies offer discounts for safety features on your vehicle or for driving a hybrid. Others give discounts to minors with good grades. There are even discounts for belonging to certain groups such as AARP or AAA.
Be sure to ask what discounts may be available for you, and you can save money on car insurance without much effort!
Keeping The Same Company For Years
If you automatically renew your insurance with the same company year after year, you may be overpaying. Failure to check out the competition can cost you money. Typically, your insurance rates will increase every year.
It is always a good idea to check to see if you could get cheaper coverage with another company.
Buying More Or Less Insurance Than You Need
It is important to determine how much coverage you actually need. Most states have a minimum amount of insurance that you are required to carry. For some, this is all that they need. For others, more coverage is better.
If your car is new, you will want to make sure that it is covered for collision and comprehensive damages (although you still may not be able to file a claim for damaged money if you’re in an accident ;-)). If you have an older car, you may only need to be covered for liability.
Another consideration is the amount of deductible you choose. If you can afford to absorb the costs of minor damage, you do not need to pay extra for a low deductible. Choosing a higher deductible can save money in the long run.
In Conclusion
Once you have determined your needs, the next thing to do is to get a list of all of the licensed insurance providers in your state from the department of transportation. Next, go online and check out these companies. Look for comments from past clients and general reputation. Also, look for customer service and ease of contacting a representative.
Next, request free rate quotes from several cheap auto insurance companies. Be sure to do an equal comparison. Do not request one level of coverage from one provider and a different level from another one. By doing this, you will be able to make an informed decision and be satisfied that you have chosen the best, most cost effective insurance that meets your needs.
photo by Bill Longshaw
I notice how my rates go up gradually each year when I re-up with the same insurance company, even though I never get into an accident or receive a ticket/summons. I think companies do that because they know most people are too lazy or busy to comparison shop if the rate increase is slight; so the companies raise rates in a given year (most times, I feel, for no good reason at all other than greed), enough to make a bigger profit, but not enough to scare the typical consumer away…
Make sure to use one insurance company for as many policies as possible as they will give you steep discounts for having more than one policy. We just added an umbrella policy to our home and auto policies and it actually worked out to us paying less. Go figure!