Today many people do not want to spend the extra money each month in order to carry adequate car insurance. Many simply buy the minimum that is required, or some skip it all together. In today's economy, many people simply cannot afford to do these things. Not having insurance can lead you to be stuck with hundreds of thousands of dollars in bills if you were to be involved in an accident. Today it is even more important to carry adequate car insurance, but fortunately, you can generally find a discount premium to help ease the financial burden each month.
First it is always a good idea to understand the factors that go into your car insurance premium. Car insurance rates are calculated based on risk - the higher the risk, the more you pay. Although most people think of driving history as the main indicator of risk, this is just one of many factors. Car insurance companies do extensive research in order to find factors that correlate with risk. Things such as marital status, age, gender, car type, credit history, occupation, address, and education level are all factors that can help determine your car insurance rate. Once you understand how your rate is calculated, you can try to adjust your life so these factors are working in your favor.
Car Insurance Discounts
Some of the factors responsible for your car insurance premium cannot be changed. You cannot help your age or gender, for example. Fortunately, another way to save money on your car insurance is through insurance discounts. There are many different discounts, but not all insurance companies will offer every discount, and there will be different eligibility information across the companies. Here are some of the most common car insurance discounts:
- Good student - this discount is given to students who maintain a certain GPA each semester. It can apply to high school and college students.
- Driver's education - you can earn this discount for taking a driver's education class. Not all classes count, so it is best to check before enrolling.
- Good driver - by avoiding accidents and traffic violations, you can get a discount on your car insurance. Some companies increase this discount each year you stay safe on the road.
- Loyalty - staying with the same car insurance company over time can often earn you a loyalty discount.
- Multi-car - if you have multiple cars in your family, insuring them on the same policy can get you a multi-car discount.
- Multi-policy - similarly, if you have other insurance needs (home, life, health, renters, etc.) you can usually get a discount for purchasing all the policies through the same company.
- Safety and security- by driving a vehicle with updated safety and security features, you are less likely to be hurt in an accident or have your car stolen or vandalized. This lower risk means more savings for you.
- Low mileage- if you stay under a certain amount of miles per year, you can usually earn a discount. This is simply because the less you are on the road, the less likely you are to get into an accident.