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Overpaying on car insurance? Here are some helpful tips

April 3, 2012

Car insurance is among the many necessities you have to pay for in order to be legal on the road, but it doesn’t have to be something you’re overpaying for. Most people would like to find a way to save on car insurance, but either aren’t sure they can really get a better deal or don’t know where to begin to lower their current rate. Insurance insiders know there are many ways to save on auto insurance, and these tips and tricks will get you lower rates with no hassle.

How to Know if You Overpay

Although most people shopped around for car insurance when they first bought their policy, they then have a tendency to settle in and simply stay where they are. After all, the current policy was a great deal when you bought it, so it must still be a good rate, right? Not necessarily. Rates change over time, sometimes dramatically, and each insurance company charges different rates. So if you haven’t shopped around in a while to compare, you could be overpaying without knowing it.

Even within the same insurance company you could be overpaying if you haven’t reviewed your policy in a while. It’s well worth sitting down with an insurance professional on a regular basis to see what might have changed that could affect your rate.

Keep in mind that comparing your rate with that of another person is not a good way to determine if you are overpaying. The many variables involved in determining insurance rates mean that comparing rates with others is generally pointless as a method of determining if you’re overpaying.

What Insurance Insiders Know

The big secret that insurance experts know is that insurance rates are not static. Each insurance company has the ability to review and change their rates regularly – not just for individual drivers but as an overall change in rating. That increase in rates you saw on renewal might simply be a company-wide increase, which means it has nothing to do with you or your driving record if nothing has changed there.

The absolute best way to ensure you are not overpaying is to shop your insurance rate on a regular basis, preferably yearly when your policy renews. When you get your renewal paperwork, take a look at the rate and then go get some quotes to compare. You could get a much better deal, and by switching on renewal avoid early cancellation penalties.

Even if your current policy still seems to be a good deal – good enough that it’s not worth switching when you consider fees – it doesn’t mean you can’t save even more on that policy. There are still more tricks to getting a lower rate.

Lowering Rates Right Away

If you don’t want to switch mid-term due to penalties and new policy fees or if you’re happy where you are but wonder if you can get the rate down a little more, there’s good news – you probably can. There are several ways to lower your rate right away, without making a big switch.

First, take a look at your deductible. Carrying a higher deductible, especially on collision coverage, is one of the quickest ways to get a lower rate on your coverage. Make sure you don’t make the collision deductible so large as to be hard on you in case of a claim, but remember that if you don’t have an at fault accident, it won’t become an issue.

Next, request a list of available discounts from your insurance company. Go over them and see which ones you might qualify for that you aren’t receiving. Insurance companies don’t always catch changes or new discounts that apply to your policy, so it’s up to you to make sure you’re getting all of the discounts you deserve.

Finally, ask to take a look at which driver is rated on which car and ensure it’s accurate. If you can, consider having anyone with a longer commute drive a more affordable car – that is, if you have two cars, one of which is older and less expensive to insure, that’s the one best suited as a long-commute car because it has lower rates overall. Make sure you are being honest about who is driving what of course, but if you can make a switch in your driving habits it might save a lot of money.

The only way to know if you are overpaying on car insurance is to get a car insurance quote and compare – to find out how you might be lowering your current rates. Taking the time to review your policy regularly is a small task that that could save you a large amount of money over time. Make a yearly habit of it, and you won’t ever have to wonder if you are paying too much.