6 Ways to Get The Cheapest Auto Insurance Possible
Have you searched for ways to obtain cheap auto insurance? Even within the same state, some drivers pay reduced insurance premiums. Using these six strategies may prove helpful:
One: Search Carefully For an Insurance Firm
One of the most valuable steps auto owners can take to obtain the lowest possible insurance rate involves evaluating the policies of several different companies. From time to time, insurers launch new programs which may offer better rates for drivers within specific demographic groups. By searching diligently (and frequently) for the cheapest auto insurance available to you, you'll improve your chance of securing a bargain.
Interested drivers obtain a wealth of information by searching for insurance online. You might also consider contacting several different companies and requesting information. Additionally, your family insurance agent will likely offer assistance with this type of search. Today consumers enjoy multiple avenues for locating accurate, current information about different auto insurance providers and rates.
Two: Move to Maine, Iowa or Wisconsin
Although not an option for everyone, you may discover your car insurance premiums fall significantly if you relocate to Maine, Iowa, or Wisconsin. Reportedly, residents of Maine pay the lowest average annual auto insurance premiums:$889, i.e. less than $75 per month. Drivers residing in Iowa and Wisconsin also pay low rates compared to residents of other places, averaging $985 and $987 per year respectively.(1) Relocating to these states helps some households reduce their annual premiums.
Of course, not every driver can move elsewhere in order to receive better auto insurance rates. Drivers in Louisiana, Oklahoma, and Michigan currently pay the highest annual premiums on average in the United State. In the Pelican State, an area devastated just a few years ago by Hurricane Katrina, drivers should expect to pay an average yearly premium of $2,536, or just over $211 per month.(1)
Three: Maintain Good Credit
Surprisingly perhaps, another way to obtain the cheapest possible auto insurance involves paying close attention to your credit. By maintaining a very high credit score you improve both your ability to borrow money at a lower rate of interest and your capability to obtain lower auto insurance rates. Reportedly, insurers apply confidential risk scores to people seeking insurance which largely mirror the credit scores provided to consumers seeking loans.(2)
Today consumer credit scoring typically ranges from an excellent score of 850 to a poor rating of 300. Many insurers rationalize the decision to tie the insurance score rating to FICO credit scores based upon the idea that someone with a low score has not managed money well. Presumably, people with higher FICO ratings do display money management skills. They maintain a lower risk of missing premium payments.(2)
Four: Take an Approved Driving Safety Class
Some auto insurance firms will give premium reductions to policyholders who voluntarily undertake (and pass) driving safety courses. These companies seek to reward safer drivers with lowered premiums. Reduction available for demonstrating an interest in roadway safety typically decrease the premiums of graduates by 5% to 10%.(3)
If you seek this type of discount, you need to make certain your insurer will offer it before you enroll in a safe driving course. Not all insurers approve all driving safety classes for this purpose. To avoid disappointment, it usually makes sense to request a list of approved safety courses from your insurer in advance. Then follow instruction for claiming the discount carefully.
Five: Practice Defensive Driving
One way to help obtain the cheapest possible insurance rates involves adhering to safe driving practices. Following roadway safety rules help reduce the chance of causing an accident. By always wearing your seat belt, remembering to use turn signals, and paying attention to your vehicle's condition, you'll drive more safely.
Most insurance companies prefer to insure safe drivers, because these individuals maintain a lower risk of causing costly auto accidents. If you have demonstrated poor driving in the past, some insurance companies will lower your premiums if you maintain a demonstrably improved driving record over the course of several years. This practice varies from one company to another, so if you hope to obtain lower rates this way, you may need to shop carefully for insurance.
Six: Don't File Multiple Auto Insurance Claims
Finally, drivers who repeatedly file auto insurance claims run a risk of incurring higher rates and/or having their insurance cancelled. It makes sense to only file a claim after an accident when absolutely necessary. Insurers prefer to cover safe drivers who do not file claims.
Insurance companies must honor their policies. Yet they are not required to issue new policies to poor drivers. Filing too many insurance claims may make a driver a poor coverage risk.
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