Hello, Frugalistas! We have a guest blog from The Hartford Financial Services Group, advising on ways to save on auto insurance.
3 Steps, 10 Minutes to Auto Insurance Savings
When times get tough, financial trade-offs are inevitable. One area where consumers may be looking to save as much as possible is their car insurance. And like most things, there’s a right AND a wrong way to go about it.
Yes, you may save money in the short run by changing your policy. But eliminating those coverages from your plan may put you in a bigger financial hole in the case of an accident, and you should always think through important factors like things such as how far, how much, and what type of vehicle you drive.
Step 1: Think Long Term
· Think of the Long-Haul – Most insurance companies think in the long-term too, and they prove it by offering additional benefits to long-time, loyal customers. Drivers thinking of switching insurance providers just to save on their monthly payment should first check with their insurance provider to see about any additional savings they may soon be eligible for.
Step 2: Delve into Discounts
· Apply the Rule of “Safety in Numbers” – While insurance companies have their own set of numbers that they use to evaluate the potential risk of individual drivers, there are ways to make the numbers work for you by consolidating. This applies in a number of areas such as:
– Membership Discounts – Many providers offer group plans from employers or through professional, business and alumni groups or other associations.
– Family Discounts – Similar to any family cell phone plan, most companies are able to offer special rates when households insure multiple vehicles under the same plan.
– Multi-Product Discounts – While “diversifying” is the key to any financial savings plan, “consolidation” is the path to take if saving on insurance is the end goal. Insurers such as The Hartford provide discounts for customers who use other products like homeowner’s insurance.
– Carpooling – Drivers who ride with others to work can often benefit from low mileage discounts on their policies.
Step 3: Pay Wisely
· Don’t Delay When You Pay – Believe it or not, paying your rent on time can actually have a bearing on the cost of your car insurance. That’s because your credit score is an important factor in determining your rates. And that means the bill-paying balancing act may actually cost you more on insurance. If you find yourself having to make the best of a challenging financial decision, try raising the deductible on your policy. Increasing a deductible from $250 to $500, for instance, could reduce the collision and comprehensive coverage premium by 15 to 30 percent while keeping you protected in the case of an accident. However, drivers should be prepared to pay the amount of the deductible should something happen to their car.
What do you think about these tips? Have you considered changing your auto insurance because it was too pricey?
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