Editor’s Note: This was originally published on RISMedia’s blog, Housecall. See what else is cookin’ now at blog.rismedia.com:
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High insurance premiums are a reality for many consumers, but they needn’t be for all consumers. High premiums are sometimes paid for by consumers who don’t realize they’re paying for them. Other people who overpay have no idea they have the power to lower their premiums using a number of tried and true techniques. It’s not impossible to find lower car insurance premiums, but it’s also not something most people know how to do without a little guidance. These tips can help you avoid paying high premiums, save you money, and make your life just a little more affordable.
Check Your Credit
The most important thing you can do before you sign any insurance contract is check your credit. Most insurance agencies use your credit to determine your risk as a customer. If your score is low, they figure you’re a risky customer. They think you’re more likely to file claims you can’t afford to handle on your own, and they charge you more than they charge other consumers. Now is the time to check your score, figure out if there are any mistakes on it you can fix to help raise it, and then apply for new insurance premiums.
Don’t Drive a Risky Car
It all depends on what you drive if you want to avoid high premiums. You’re going to get the best rates on newer cars that are large and filled with safety features. You’re also going to see better rates on cars that have easy-to-find parts, that hold their value well, and that aren’t sporting big engines that use a lot of power. It’s better to drive a safe car than a sports car.
Know the Crime Rate
There’s not a lot you can do about where you live, but you should know it can affect your premiums. If you’re shopping for a new home, check the crime rate to see if it’s high or low. People who live in areas with a high crime rate pay more. This is because they are more likely to see damage occur to their car in the form of vandalism or theft, and they’re more likely to get into an accident with someone who doesn’t have insurance of their own if the neighborhood isn’t as financially stable as others.
Know What You Need
Cheap auto insurance is entirely possible to have if you know what kind of coverage you need. If you drive a brand-new car, you need a lot more coverage than someone who drives an older car. If you drive a car that’s paid in full, you might not need as much insurance as someone who has a car with a loan on it. It’s all dependent on what you drive and if it’s paid for. Lowering your coverage to complement your needs is a good way to save money and avoid paying high premiums.
Know How to Pay
Did you know you can lower your premiums by allowing your insurance company to automatically debit your fee each month from your bank account? When they feel they’re more likely to get paid, they’re going to offer you a discount. When you pay your premium up front rather than paying monthly, you’re also eligible for bigger discounts. Know what you can save when you pay up front, and you might just avoid a much higher deductible.
Where you live and several other factors all play into what you pay for car insurance, and you should know these things in advance. It’s easier to save money on insurance when you’re aware of what you’re looking for and which factors affect your rates. Ask what discounts you get with your policy, and don’t be surprised when your agent begins listing what you might qualify to receive for being a long-time customer.
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