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Five Ways To Lower Your Insurance Rates
Author David Schneider | Aug 28,2007
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Car insurance companies deal in the world of 'risk versus reward.' They're only rewarded if the money they receive for covering a motorist exceeds the cost of insuring him or her. When applying for auto insurance, the company is weighing the risk of covering a motorist against the payments they'll receive. The best way for a motorist to save on car insurance is to pose less risk to the company. When insuring a motorist, a company will look at a number of details to determine how much they should charge for insurance. If the motorist focuses on improving those factors, they can lessen the cost. Here are five ways to lower your insurance rates.
Be a Safe Driver
This is the foremost as well as the most obvious, but most insured driver's don't know how much it can save them. We all know that speeding costs money in tickets and fines, but what most don't know is that even one speeding citation can significantly increase an insurance premium - for years. Speed kills, and insurers realize this. Fortunately, a driver who has been busted for violating motor vehicle laws can improve their insurance rates by slowing down and following the rules of the road. While almost everyone has a few speeding tickets, those who display the ability to stay friendly with Johnny Law for a few years are looked on favorably by insurers.
Get Good Grades
Young drivers pose a significant liability to insurers. Studies show that teenagers display dramatically more risk in driving than their seniors. However, drivers still in high school (and, depending on the insurer, college) can receive lower insurance rates by keeping their grades up. Insurance companies have found a positive connection between academic achievement and safe driving, and reward those who do well in school.
Employ Anti-Theft Measures
When insuring a car against theft, having anti-theft measures installed can lower the insurance premium. While the cost for the devices is an up-front expense, it can pay itself off in the long run through lower rates. Car alarms, false ignition prevention, and GPS tracking of vehicles (often done through a third-party company) can improve the chances of recovering a stolen vehicle. Insurance companies reward those chances.
Pay Higher Deductibles
A deductible on an insurance policy is the amount of money you, the car owner, is willing to pay toward an accident before the insurance company steps in with coverage. Most times, if a driver is willing to pay a higher deductible, the premium, or cost of insurance, will go down. While this can save the insurer money in the case of an actual accident, they are also happy to accept a higher deductible for another reason: Studies have shown that when there is more financial risk to a driver, accidents are reduced.
Shop Around
The auto insurance market is a competitive one, and the cost of insurance can vary dramatically from company to company. While some companies offer to display their competitors' rates, the only way for a driver to get the best possible rates is to look around. The Internet makes it easier than ever to do comparison shopping on insurance.
Everyone wants low insurance, but the best way to insure that you'll receive it is to display safe driving, and explore your options by searching for good rates and premiums. It costs a little time to fill out some online forms, but the savings are worth it. That's an example of risk versus reward that any insurer would be happy to take. |
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