From gas to maintenance, owning a car involves many costs. One of those costs is car insurance. Since it is mandatory, you can’t avoid this annual cost, but you can enjoy lower car insurance rates if you are smart. By following these five guidelines, you can help keep your auto insurance rates as low as possible.
1. Never Miss a Premium Payment
A lapse in payment is the fastest way for you to lose your car insurance. And if your policy is dropped, even for a few days, you could lose all accumulated loyalty or trusted customer discounts. The easiest way to avoid missing a payment is to enrol in an automatic payment plan or if you can, pay in full at the start of your policy period.
2. Never Drink and Drive
Drunk driving is just about the worst thing you can do in terms of auto insurance premiums. A drunk driving conviction stays with you for years, and insurance companies will consider you incredibly high risk, which significantly increases your insurance premium. Since it isn’t always possible to know when you will be drinking, always keep a phone number for a taxi or car service in your wallet.
3. Always Inform Your Insurance Company When You Purchase a New Vehicle
Nearly every insurance company will transfer your insurance to a different (new or used) vehicle, but you must advise them within a specific time frame. That time frame differs from company to company, but it is best to assume that it is as short as possible. And, much like missing a payment, if you don’t transfer in time, you can lose accumulated discounts. The easiest way to enable a prompt transfer is to contact your insurance company before the purchase is made so the process of insuring your new car is begun before you it.
4. Never Loan Your Car to Anyone
Did you know when you loan your car to a friend or relative, your car insurance goes with them? While this doesn’t put you on the hook for every car infraction, it will cause your premiums to increase in case of an accident. If you know you will need to loan your car at times, it is best to make sure you have very good collision coverage and liability insurance.
5. Avoid Making Claims for Small Damage
Your insurance policy only offers a good return on your investment if you use it to cover high cost situations, like a major accident or theft. If you claim every small fender bender, your rates will increase. Many insurance companies won’t increase your rates if another party is at fault, but make sure you are certain the other party is at fault before making a claim in such a situation.