Most states require all drivers to carry some level of car insurance in order to retain their license. But car insurance can be expensive, and drivers on a tight budget can sometimes find it difficult to keep up the payments on their insurance premiums.
But car insurance is rarely an option, and if you want to remain licensed to drive you have to have some degree of coverage. Fortunately, there are ways to save money on the cost of car insurance, and still maintain the coverage necessary to remain licensed to drive in your state. The following five essential tips will help drivers on a budget find the coverage they need at the price they can afford.
1 – Understand Your Insurance Needs
All insurance policies are different, and understanding your car insurance requirements will help you find the policy that meets your coverage needs as well as your financial circumstances. For example, if you have a new car, and are still paying off your auto loan, you will need full collision and comprehensive coverage. In case of an accident, your policy will need to cover the full value of your automobile so that you don’t wind up paying off an auto loan on a car that has been totaled and written off. On the other hand, if you have an older car that has been completely paid for, the blue book value may not be high enough to warrant carrying full coverage.
If the cost of repairing your car is more than the perceived value of the car, it will be totaled and you will only be compensated for the blue book value. In this instance carrying a comprehensive policy may not be the best financial decision. Of course, regardless of the value of your vehicle, you should always carry liability and injury insurance.
2 – Increase Your Deductible
The deductible is the amount of money you will be required to pay out of pocket in the case of any insurance claim. The lower your deductible, the higher your premium. If you increase the amount of your deductible you can reduce the cost of your premiums. However, it should be noted that you want to be careful when increasing your deductible. This is the amount of money you will be required to pay out of pocket, and you should be sure that you can afford to trade a higher deductible for a lower premium payment.
3 – Maintain a Clean Driving Record
Insurance companies reward drivers with clean records, and typically offer them more comprehensive policies at better prices. Maintaining a clean driving record will put you in a better position to get the coverage you want at the price you need. Obey the rules of the road, watch your speed, and avoid any moving violations. This isn’t just sensible driving behavior, it’s a ticket to lower insurance premiums.
4 – Look For Discounts
Insurance companies often offer discounts on their car policies, but they don’t always advertise them. Ask your insurance agent if you qualify for any discounts that could result in a lower premium. For example, some insurance companies offer discounts to clients who hold multiple policies with their firm.
You may be able to reduce your premium by moving your homeowners insurance and your car insurance under one roof. Insurance companies also often offer discounts for military personnel, students with high grade point averages, and for clients who have completed a defensive driving course.
5 – Shop Around
All insurance companies are different, and it is always a good idea to comparison shop before you decide on a carrier. Get insurance quotes from a number of different companies, and see who can offer the best coverage at the most affordable prices. You may find that comparison shopping can yield remarkable savings.
Every driver needs car insurance, and it is important to find the policy that is right for you. These five essential tips will help you find the best policy for your driving needs, and at a cost that will suit your budget.