Saving on your Car Insurance

According to the February 2013 publication of the U.S. Bureau of Labor Statistics, transportation is the second greatest source of expense of the average American family next to housing. Monthly car payments, gasoline and maintenance cost a lot of money, indeed! Although it is possible to cut down on monthly payments by purchasing a cheaper car and to save on gasoline by adopting responsible behaviors on the road, an easier way to systematically save transportation money every month is to lower your car insurance premium.

Combine your policies

When it comes to car insurance, one way that generally leads to substantial savings is to combine your policies with one single company. In effect, if your household has more than one car in the driveway, insuring them with the same carrier can make you eligible for interesting discounts. Moreover, insuring your home and other assets at the same place as your cars can have a substantial impact on the amount of money you pay every month to protect your vehicles.

Shop for the right car

If you must replace your old car with a new one, do not overlook the impact that various models can have on your insurance premium. In fact, if you decide to purchase a model that is statistically involved in a lot of road accidents or one that happens to be very popular among thieves, then it is very likely that your insurance premium will increase because you are exposing yourself to higher risks.

You also ought to consider buying a hybrid or an electric car, especially if you have access to some inviting governmental rebates. Not only will the upfront cost be compensated by the savings you’ll realize through maintenance and gasoline in the long run, but your insurance premium could be lowered just because you are likely to be considered less at risk by your insurance company. The same is true if you opt for safety gear when you purchase your car: devices that make your car less at risk of being robbed or damaged should help you save on your insurance premium.

Request a higher deductible

When you file in a claim with your insurance company, a fair share of the bill is paid by your carrier but you also generally have to pay a small amount that you agreed upon when you signed your contract. This amount of money that you have to pay as the policyholder is called a deductible, and it usually ranges between $250 and $1,000. If you request a small deductible, it means that your insurer will pay a greater amount of the bill every time you file in a claim.

However, opting for a small deductible generally means that your premium will be higher. In the long run, these higher monthly payments can add up to much more than a higher deductible, especially if you never file in a claim! Therefore, if you do not drive much in accident-prone areas and if you are a responsible motorist who does not adopt risky behaviors on the road, you should consider going for a higher deductible. Comparing the impact of various deductibles on your insurance premium always is a good idea.

About the author:

Alexandre Duval is a blogger for Standard Life, a company that helps you plan your retirement and that offers an online service for retirement information. Alexandre is also currently completing his master’s degree in political science at the University of Quebec in Montreal.

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