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Car insurance can be a pain in the neck to understand, but failing to do so can cost you big bucks. Not all policies are the same, and small changes can equate to big savings.
The new year is almost here, so it’s time for a year-end review of your auto insurance policy. Money Talks News founder Stacy Johnson offers some tips that can help you reduce car insurance premiums. Watch the video below and continue reading for additional money-saving tips.
1. Increase your deductible
You can save 10 percent to 15 percent on comprehensive and collision coverage by raising your deductible from $250 to $1,000. Afraid you won’t be able to meet that amount if you’re involved in a car accident? Create an emergency fund to cover the cost so that if you file a claim you will not have to wreck your budget.
2. Choose the pay-as-you-drive option
With Progressive Snapshot, you could save on your premiums by plugging a small device into your car’s diagnostic port to track your driving, including how many miles, how often you slam on the brakes and how often you drive between midnight and 4 a.m.
State Farm’s Drive Safe & Save program uses your car’s OnStar, In-Drive or Sync communication system to collect your driving information.
Allstate’s Drivewise devise plugs into the diagnostic port.
Will you save money? Perhaps, depending on the program and how you drive. Besides tracking mileage, insurers may check to see if you brake hard, if you make jack-rabbit starts, if you speed, or if you regularly drive late at night.
Check to see if pay-as-you-drive programs are available in your state. Often you can try it out for a month to see how much you’d likely save.
3. Comparison shop
Prices change, so it’s important to compare what you’re paying now with rates at other companies.
The lowest price doesn’t always mean the best policy for you. You want a company that’s not only financially stable but also offers dependable and timely service. The Insurance Information Institute recommends that you ask for recommendations from friends and family, get online quotes, call local providers, review consumer guides and search your state insurance department’s website.
You’ll want to compare quotes from no less than three insurance companies. You can find quotes with our insurance tool.
4. Ask about discounts
Insurance companies offer a variety of discounts to qualifying policyholders. For example: