According to the United States Department of Treasury’s Federal Insurance Office, the average American household spends around two percent of its annual income on personal automobile insurance. However, auto insurance companies typically raise and lower premiums based on several factors. Understanding these factors will help you monitor your premiums accordingly.
Keeping this in mind, here are eight tips on how you can lower your auto insurance premium.
Whether you are a new or experienced driver, completing a defensive driving course can lower your auto insurance premium. Such a course will help you become a better driver, and therefore, help reduce your premiums.
When assessing the risk associated with a policy, auto insurers typically consider a policyholder’s credit history. This means that if you have bad credit, past due balances, or any other factor that adversely affects your score, you need to develop a plan of settling them to improve your credit score.
To reduce your auto insurance premium, evaluate the coverage limits on your auto insurance policy. According to the National Association of Insurance Commissioners (NAIC), every state has different auto insurance limits and benefits. Make sure to find out your state’s minimum requirements and only add to it what you need.
Traffic violations, at-fault accidents, tickets, and DUI charges are some of the things that lead to higher premiums. Remember, a traffic ticket can remain on your record for three to five years, and insurers will use your driving record to determine your rate. By observing the traffic laws and keeping a good driving record, you will have to pay less on premium.
When your vehicle is in good condition, you are less likely to have breakdowns that result in high towing fees and repairs. Therefore, keep servicing and maintaining your vehicle in the best shape to ensure a lower premium.
The number of miles you cover daily can also affect your premium. To reduce your mileage, consider moving close to work, carpooling, taking a shorter route, or using public transportation. Driving less will also reduce maintenance costs and the amount of money you spend on gas.
The type or model of the car you drive has a significant impact on your premiums, as reported by the American Automobile Association. To reduce your auto insurance premiums, get a car that attracts lower rates. According to auto insurance experts, vehicles such as the Mazda CX sport and Honda CR-V are some of the cheapest cars to insure. Alternatively, you can lower your premiums by installing anti-lock brakes, power steering, airbags, or an anti-theft device on your vehicle.
Several insurance companies offer discounts when you insure several cars on the same policy. If you have more than one car in your home or a family member who lives in the same state as you, you can save some money by insuring the vehicles together. You can also talk to your insurer and bundle up your car insurance policy with any other insurance policy you have, such as homeowners or health insurance.
Use these eight tips to lower your car insurance premium. If you have any questions about your auto insurance premium or need some assistance with your auto coverage, contact Mike Leonard Insurance Agency today. We can connect you with our top insurance carriers, including Kemper, MetLife, Nationwide, Travelers, Safeco Insurance, Progressive, and American Strategic Insurance, to find the coverage you need.