How to Avoid Getting Ripped Off on Car Insurance

Mon, 06/19/2017 - 11:36

Hitting the road without car insurance is a move so foolish nearly no one tries it, but that doesn’t change the fact that insurance is a significant cost for new car owners. It’s important to do your research when applying for a new policy, and that includes being aware of scams and overpriced offerings.

The huge number of websites and consulting tools available today can be overwhelming. You want to make a decision that will not only prove cost-effective, but also give you the peace of mind to go about your driving without the constant concern that you might be caught out in the case of an accident. Here are a few tips on how to make the right choice and avoid scams and rip-offs.


Mileage and Parts Availability

The two largest factors that determine what you pay for insurance are how much you drive and how much it costs to repair your car. The reason it costs less to insure a Honda Accord than it does a more expensive car is because Honda will sell you replacement parts much cheaper.

Staying off the road pretty much guarantees you won’t need to file a claim for hitting someone else, which is why drivers who accrue less mileage tend to have lower payments. If you walk to work, for example, you’ll not only save on the money you put into fuel, but also you’ll receive a break on insurance premiums.

How Much Coverage Is Enough?

Typically your monthly premium will decrease based on your willingness to pay a higher deductible, should you end up in an accident. Unless you’re very under-confident about your skills behind the wheel or regularly drive in a high-risk environment, taking a higher deductible in exchange for lower premiums is usually a good play.

You also need to be wary of insurance agents who will try to sell you on more insurance than you actually need. You are required by law to have insurance for your own vehicle should you crash it into another car. In addition to that, you should purchase insurance that protects you if someone who’s uninsured is involved in an accident with you. These two products are called collision and liability coverage.

If you drive a cheap car you’re not too concerned about, you might be willing to dial back your collision coverage and save some money. For liability, have at least a $500,000 policy because this is what you’ll rely on for medical help should you be in an accident.


Driving Record and Other Discounts

We’re all familiar with the way avoiding tickets keeps your premiums low. Insurance companies offer lots of discount programs on top of the typical good driver discount. You’ve just got to know to ask for them.

For example, student drivers who have good grades are often eligible for a discount. You can expect to pay lower premiums if your credit score is good, and many companies will offer you perks if you combine policies for multiple vehicles or even bundle your homeowners and car insurance.

Make sure to get quotes from multiple providers when seeking a new policy. If you don’t understand the language in a given policy or why it’s priced so much differently from competing offerings, be proactive in getting an answer, reach out to the company or seek a third-party opinion.

Finding out you could have saved a great deal on insurance years down the road is a bad feeling, and you’re never going to get that money back. Spend a little extra time now, and you’ll be well-protected and can take pride in knowing you got yourself the best deal possible.

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