1. Location location location: check how your zip code can help you
Where you live matters for a wide array of reasons. Your home location can give you prime access to top tier school districts, job opportunities and a vibrant community. It’s also a factor that contributes to your insurance costs. Living in a highly populated area may have its perks, but it also means a higher number of vehicles on the roads. This translates into a higher probability that you could be involved in an accident.
There is also the topic of theft and high damage claims in different areas. Places with higher than average crime rate can also contribute to a higher than average amount of claims that insurance companies have to cover. Insurance companies recognize this and adjust their rates accordingly.
So if you’re looking at a higher rate than you expected it’s possibly due to where you live rather than how you drive. Even a few miles can make the difference in a higher or lower rate.
2. Own a home? Let the insurer know
Owning a home is a major milestone in a person’s life. The process alone can be daunting. Qualifying for financing, having superb credit and the means to put a sizable down payment shows financial acumen that many may never possess. Insurance companies view homeownership as proof of stability and financial maturity. To reward you as a homeowner, they offer the added bonus of discounts on your insurance premium.
Being a homeowner could save you up to 20% on your car insurance annually, with some insurers. This discount shouldn’t be confused with bundling, although insurance providers do offer discounts for bundling multiple policies. This is a stand alone benefit simply for being a homeowner and showcasing your financial success by buying a home.
3. Bundle your second car
It’s not uncommon for families to own more than one vehicle, but that also means insurance is needed to cover both vehicles in the event of an accident. You could be leaving savings on the table if you’re paying for two separate insurance coverages. Bundling the two under one policy is one of the most common forms of insurance savings. Likewise, if you have both vehicles insured with the same company the discount automatically applies and continues to compound if you were to add a third vehicle.
4. Be financially responsible
Measuring your financial status can vary depending on which factors you weigh over others. For instance; your credit score, your debt to income ratio and your on time payments can all be showcased to prove how stable your finances are. Insurance companies are incorporating this into a discount for having healthy financial stability.
The way the process goes is if you’re a good steward of your money and protect your financial health then you are likely to be the same way when it applies to your driving habits.
Achieving the financial stability discount could take the longest if you haven't always valued your credit score. There are ways to improve it over time such as:
- Be aware of your credit score
- Take the necessary steps to eliminating negative elements on your credit report
- Pay your bills on time
- Don’t bite off more debt than you can manage
5. Lower the speed to lower the price
Being a bad driver is costly no matter how you look at it. From parking tickets, to fender benders and speeding mishaps - they can all result in more money being paid out. Depending on how frequently these mishaps occur you could also see an increase in your annual insurance rates.
If you were involved in some sort of driving related issues, insurance providers will see you as a costly policy to cover. To stave their costs and cover your likely damages they will ask that you pay more per month. Avoiding these unnecessary fees is simple - be a good driver! Not only will it cost you less but insurance providers offer discounts to those with long standing good driving records. This means:
- Five years with a clean driving record
- No Accidents
- No Traffic Violations
Some companies even offer ways to track your driving over a 60-90 day period to determine your driving score and give you a discounted rate based on the results. Check with your insurance company to see what they offer.
6. Flaunt your grades
If you are in school or have a student driver on your policy, the good student discount is another common discount policy holders can take advantage of. There are a few stipulations
- Be 25 years or younger
- Be in Highschool or College
- Have at least a B average or 3.0 GPA
The reasoning stands the same as the financial stability discount, good students are more likely to be responsible drivers. Keeping good grades is much like keeping good credit- namely it takes consistent effort over time.
7. Check the fine print
Mitigating costs when it comes to your insurance can be done in a number of ways. Some may be specific to a specific user. For example, a driver's age does come into play when calculating your car insurance. Statistically speaking younger drivers tend to be involved in more traffic related incidents. That’s not to say that being over a certain age will guarantee a lower rate, however some providers do offer price reductions over the age of 21, 23 or 30.
Other cost reductions may include opting for paperless billing, installing an anti-theft device on your vehicle or lowering your comprehensive coverage to only fit what you need. Reviewing your overall coverage to determine if you’re overpaying is the best place to start when looking to lower your insurance charge.
Knowledge is money
There are several ways to reduce the impact of high insurance costs:
- Your location plays a role
- Being a homeowner counts
- Bundling = Saving
- Driving safe can mean discounts on your coverage
- Student drivers with a B average can qualify for discounts
Some may involve simply reviewing your coverage while others need an active approach. Take the time to investigate your insurance and develop a coverage plan that incorporates all of the discounts you are eligible for.