9 ways to cut car insurance costs
Many people are shocked when they open their annual car insurance invoice. Even for the safest drivers, the premiums keep escalating year after year, with no relief. Unfortunately, the usual reaction is to mumble and complain, and then write the cheque. But there may be ways to cut those costs, perhaps by several hundred dollars, if you know the tricks of the trade. Here are some simple things you can do to start saving money on your auto insurance.
Review your coverage. Every policy is made up of several components. Comprehensive coverage and liability protection are usually the minimum requirements. But you can choose to add collision insurance, which pays for accident damage to your vehicle, and contents insurance, to cover personal property that’s stolen from inside it. You may not need all these components in your policy.
Increase your deductible. You can cut your costs considerably by adjusting the deductible that applies to any claims you make. Raising it to $500 or even $1,000 means you’re assuming some of the risk yourself instead of expecting the insurance company to cover everything, so they give you a break on your emiums. That can translate into savings of up to hundreds of dollars a year.
Change the primary driver. Women are often less expensive to insure than men. If a man is shown as the primary driver when in fact the car is used more by a woman, change the information accordingly. If you have two cars, one can reasonably be shown as having a female as the main driver.
Drive an older car. Part of the cost of your insurance policy is the replacement value of your car if it is written off in an accident. Driving an older car means it will cost less to replace it with a similar vehicle, and the premium will change accordingly. This is also a good strategy for young people to reduce the exorbitant costs they face when trying to get insurance. You may even want to drop collision coverage altogether on older vehicles.
Insure all cars with the same company. If your household has two or more cars, you’ll probably get a better deal by placing them all on one policy. Most companies offer a discount of 10 percent or more on second and third vehicles.
Use public transit to get to work. Insurers charge more if your car is used for daily commuting. You’ll be amazed at how much the premium will drop if the car is left at home. Plus if you take the bus or subway, you won’t have to pay for parking.
Decide if you need the extras. Often, insurance companies provide a rental car if yours has to go into the shop for repairs. It’s a nice convenience, but perhaps an expensive one. Ask how much the company is charging for this rider. If you already have a second vehicle in your driveway, consider cutting the replacement car option from your policy to save some money, unless the cost is very low or it is included free. Also, find out what other riders your policy may have (such as covering you for car rentals) and check the cost involved.
Check the risk rating. Before you buy a car, check the risk rating with the Insurance Bureau of Canada. Make sure the car you want to buy isn’t on car thieves’ “most wanted” list. If it is, you’ll pay higher premiums.
Shop the market. Insurance brokers typically represent only a handful of companies. Don’t rely solely on your broker to find the best quotes for you. She might offer you the lowest rates among the companies that she represents, but that doesn’t mean that she’s showing you the best rates in town. Speak to a number of insurance brokers, or take your research to the Internet. One good place to start is http://www.insurance-canada.ca.
Yes, car insurance is expensive. But with some of these strategies, you can drive yourself a bargain.