Posted By 
By Gary Bordeaux
Special to the Financial Independence Hub
Auto insurance can be a costly affair. Getting car insurance is important because it is a legal requirement and it can be a financial benefit if you are involved in an accident. Over 203 million Americans spend about US$125 every month to insure their car. So, what can you do to lower your car insurance cost? Read on to find out.
Shop around
Check out several companies for deals and offers, as insurance cost can differ between motor insurance providers. For example, the average annual rate for drivers insured with State Farm and Geico is US$1327 and US$1667 respectively. Online sites are a perfect place to research insurance price, discounts, welcome bonus, and other requirements. Keep in mind that a cheaper option for one driver may turn out to be costly for another driver.
Don’t add younger drivers to your policy
Drivers aged 15-25 years are 32% more likely to cause an accident than older drivers. Therefore, younger drivers are likely to pay more for their insurance than older drivers. If your kids are ready to drive, get them their own insurance and encourage them to accumulate their no claims bonus. You can convince your co-workers or parents to become co-driver on your insurance policy. Also, add additional drivers to your insurance policy only when they need to use the vehicle.
Protect your car
Some of the details you will divulge to the insurance company when signing up for a car insurance policy include where you park the car at night and the car’s security features. The insurance companies may use insurance document management software to store your details. Drivers who keep their car in a garage and have installed a plethora of security features are likely to enjoy subsidized insurance premiums.
Group Insurance
It is common for employers to provide health insurance for their employees. However, it is possible to acquire auto insurance through the same means. Group insurance is when many individuals, usually co-workers or family members, jointly apply for an insurance policy. As a result, the group is able to utilize the benefits of collective bargaining to get discounts and lower premiums. The only downside is that you don’t have the liberty to choose your preferred insurer. Large corporations, alumni associations, fellowships, and hobby groups are some of the entities that are eligible for group insurance.
Do away with unnecessary coverage
Legally, you are only obligated to sign up for liability insurance in the United States. This is the type of insurance required to cater for damages and injuries inflicted on third parties. Some drivers choose to add other types of coverage to the liability coverage. For instance, you may get collision coverage to offset the cost of the destruction your vehicle suffers in a motor accident.
The additional coverage provides a more solid protection but has the potential to drain your finances. In some instances, the additional coverage can triple the initial cost of the insurance. You can axe the extra coverage from your insurance and invest the money in a repair fund.
Raise your Deductibles
Including collision and comprehensive coverage on your policy has its benefits. For starters, you can ask for deductibles under this type of insurance policy. A deductible is the money you will have to add to your insurance claim. A higher deductible means you will pay lower monthly premiums but higher amounts when you are involved in an accident. Some drivers are able to take advantage of this policy and lower their car insurance policy by as much as 40%.
Bundle your Policies
You probably are bundling your data, TV, and phone into a single package so as to save money. The same strategy is often used in insurance where several policies are bundled into one. You are likely to get a discount if you buy multiple insurance policies from the same insurer. If you have more than one car, then you may be eligible for a discount if you insure all of them with the same company.
Bottom Line
When choosing an insurance provider, avoid getting distracted by discounts. Some insurers may use discounts to lure you into buying a policy that will end up being too expensive.
Gary Bordeaux is a real estate professional and company owner based in Portland, Maine. As a retired real estate agent, he spends his time and energy investing, and writing about what he has learned. His goal is to help entrepreneurs and small business owners achieve their full potential.
