Car Insurance Tips & Tricks
By this point, you might be wondering if there is anything you can do besides shopping around for different insurance policies to improve your rates on San Diego car insurance. Tips on how to do this can really make a difference on the rates you pay and the savings will add up over time. First, it is important to understand how insurance companies work. They determine premiums based on the amount of risk they think you pose as a driver. In other words, how likely are you to make a claim? Even though insurance companies are dedicated to providing you the support you need when you get in an accident, they also are betting on you not needing their money. If they think you are more likely to file a claim because you fit the mold of a risky driver, they will increase your premium accordingly to compensate for this risk.
The good news is that you do still have some control over your premiums, provided you meet certain criteria.
Below are a list of 8 San Diego car insurance tips and tricks that will help reduce your premiums. These are by no means hard and fast rules, but should be considered merely as rules of thumb.
1. Adjust your Deductible:
The deductible you choose ($250, $500, $1000, etc.) is essentially the amount you have to pay before the insurance coverage kicks in. For example, if I am in an accident and it will cost me $2,000 to repair the car and I have a $500 deductible, I will have to pay $500 and the insurance company will pay the remaining $1,500.
You can reduce your insurance premium by choosing a higher deductible (such as $1,000 rather than $500). The downside is that if you get into an accident, you will have to pay more money up front before the insurance company pitches in. Additionally, simply the fact that you have selected a higher deductible may, in some cases, lower your premium because it signals to the insurance company that you are more responsible. In other words, if you are prepared to pay $1,000 rather than $500, statistics show that fiscal responsibility transfers over to driving responsibility. Another explanation may be that you are more confident that you will not get in an accident, thus willing to risk a higher deductible.
2. Ask your Agent for Discount Opportunities:
Many insurance companies offer discounts pertaining to anything that reduces risk and/or conveys customer loyalty. Some of these discounts include the following: · Vehicle Equipment related discounts (Anti-lock brake systems, anti-theft systems, daytime running lights, etc) · Good Driver discounts · Loyal Customer discounts (multi-vehicle, renewals) · Education discounts (good student & drivers' education)
Since each insurance carrier is different, be sure to check with your agent for more details.
3. Choose the Right Car
The type of car you drive might also have an impact on your insurance premium. In general, car insurance companies have determined that certain vehicle models pose greater risks to claims that others. Statistics show that certain types of drivers tend to choose certain vehicle types that effect what insurance companies call the loss history. For example sports cars carry a higher premium because the people who choose to drive them are typically more aggressive drivers looking for speed and thrills when they drive. Driving at higher speeds correlates with an increased accident rate. On the other hand, a mom driving a large SUV or minivan probably does not drive as fast and stays off the roads during rush hour, meaning that she is at a lower risk of getting into an accident. The sports car will carry a higher premium while the minivan premium will be lower.
When looking for a car, stay away from the sports cars, ask your agent for suggestions, or check out a list of the least expensive 2010 models to insure.
4. Monitor your Mileage
The more you drive, the more you are exposing yourself to risk of an accident. Take a look at your commuting situation and see if you can make some changes that would reduce your premiums. For example, if you can commute to work by public transportation and save the car for the weekend, this could save you some money. Alternatively, if there is a change in your job situation and you begin working from home, be sure to let your agent know so that your mileage and premiums can be adjusted accordingly.
5. Drive Safely
Once again, the less risk you present as an insured driver to the insurance company, the more they will reward you with lower premiums. Though it is not always in your control to avoid an accident, if you can maintain a clean driving record, your savings could be significant. Some carriers will reward you with up to 25% off your premium just because you have a clean record.
6. Choose an Annual Policy
Most insurance companies give you an option of paying annually or on an installment basis. Installment plans range from twice a year to four times a year to every month. Regardless of the frequency, many insurers require those on installment plans to pay a small fee for every installment. If you pay upfront and in full for the entire year (annual policy), you will not be charged additional fees. Thus, if you can afford to pay the annual premium, you will save by avoiding excess financing charges.
7. Send Payments Electronically Rather than by Mail
Thanks to rapid improvements in technology, insurance companies are doing more and more business electronically. This involves everything from sending policy information to accepting payments. Once insurance companies have the electronic payment systems in place, they no longer have to pay for people to manage paper checks and payments. These savings are often passed on to you in the form of discounts on your policy.
8. Improve your Credit Rating
Believe it or not, your credit score may also affect your insurance premium. Somewhere within the millions of statistics that insurance companies aggregate about drivers, they have determined that those with higher credit ratings typically have a better loss history. The theory behind the statistics is that if you have a higher credit rating, you are deemed as less likely to get into an accident or report a loss. This is not an easy one to change and may take time, but it is certainly worth making the effort since credit scores affect even more than just insurance premiums.
That’s all for now on Tips & Tricks. We hope that in this section you have found at least one San Diego car insurance tip that works and will save you some money!