You need auto insurance. It can save you from being held liable for costs associated with an accident you are found responsible for. It can help you pay for repairs or a new vehicle following an act of theft or vandalism, as well as damage resulting from fire, hail or falling objects. And if you’re blessed to live in the great state of Iowa (or another state with similar laws), then you are legally obligated to carry auto insurance.
All of this is another way of saying you need to pay for auto insurance. Fortunately, you may not have to pay as much as you think. If you would like to pay the lowest possible premium, you may take any of the following steps.
Increase Deductible
The higher the deductible, the lower the premium. Just take care that you understand the potential downsides to raising your auto insurance deductible. Your out-of-pocket expenses following an accident will be higher, and filing a claim for a smaller collision may prove impractical.
Choose Claims Wisely
Do you have a $500 deductible and need a $750 windshield repair? Then it is likely in your best interest to pay out of pocket. Filing multiple claims in a short amount of time can cause your insurance provider to raise your premium. Alternatively, your insurer may choose not to renew your policy once its term expires, thus forcing you to purchase a different (and potentially more expensive) replacement.
Bundle Policies
Are you already purchasing homeowners insurance and auto insurance from the same provider? Good. People who bundle their policies save an average of 18% on insurance. They also enjoy greater convenience. Take care that insurance providers do tend to gradually raise their policyholders’ premiums, which means your savings from bundling may diminish over time.
Raise Your Credit Score
Studies show that people with higher credit scores file fewer insurance claims than those who have lower ones. Insurers are well aware of these studies, and attach weight to their policyholders’ credit scores because of them. If you would like to improve your credit-based insurance score – and pay a lower premium as a result – then raising your credit score is one of the most effective ways to go about it.
Purchase Usage-Based Auto Insurance
When you buy usage-based insurance (UBI), you agree to let your insurer monitor your driving habits. It will know what times of day you drive and how many miles you cover. Your insurer will also know when you break the speed limit, as well as when you brake and accelerate sharply. It will use those data to generate a driving score. The higher that score, the lower the premium you may pay.
Drive Safely
The primary advantage to driving safely does not beg explanation: You reduce your risk of harming yourself and others. The secondary benefit is financial. Even if you are only involved in a minor crash, your insurer is likely to perceive you as a greater risk – and raise your premium to offset it.
If you’re shopping for the most affordable policy for your unique needs, then we welcome you to contact The Hoffman Agency today for a free auto insurance quote. Our team has proudly served Iowans for all their personal insurance needs for over 60 years!