The Importance of Understanding Auto Insurance (And How It Could Save You Money)

understanding auto insurance

Having auto insurance is one of those essentials you need if you drive…legally, that is. Not just that, but having auto insurance does protect you and your vehicle should anything happen, whether it be a head-on collision or a hit-and-run. You need to see your car as an investment because it is. Thus, understanding auto insurance will be wise so that you know you are getting the best deal (and not just emptying your bank account). Here’s how you can save money while still ensuring you’re protected:

Understanding Auto Insurance

Compare Before You Buy

Similar to the concept of “try before you buy,” you want to always compare quotes side-by-side. In fact, you do not even need to wait until you are buying to do a comparison. Many companies would be more than happy to go over cost-savings with you based on your current insurance provider. But, if you don’t want to deal with a salesperson, do the comparison online.

For most providers, they will offer to email you an initial quote first based on the information you filled out. Once you do this for multiple companies, you can see the best route to take. Some sites, like Progressive, will even do a comparison side-by-side for you, which is a smart sales tactic for them. For a faster look at different quotes from various companies, though, NerdWallet offers a free online tool for you to do just that. Check it out here.

Don’t Go Without It

Every state makes it a requirement for drivers to carry auto insurance. Even motorcycle drivers need to have insurance. If you get caught without it, the costs could be much higher than your monthly premium. If you were to get into an accident, the state may go after your personal assets, you may have higher insurance costs, a suspension of your license, and so on. You can learn more about these penalties at DMV.org.

Be Cautious About Loaning Your Car

Insurance policies go after the vehicle and not the driver. This means that in an accident, they pursue the vehicle at-fault for costs, and whoever owns the car and is the policyholder is responsible for those costs. So, even if you were not the one driving your car, your insurance has to cover it, which will lead to higher insurance rates for you to pay.

More Miles, More Money

The more you drive on a regular basis, the more money you’ll have to pay for an insurance policy. They base this on the increased likelihood of an accident to take place with the amount of times your car is on the road. In order to avoid this increase, try to periodically utilize public transportation instead whenever possible.

Look for Policies With Accident Forgiveness

When you’re in an accident, your premium will typically increase, especially after multiple accidents in a row. That is, of course, unless you have accident forgiveness in your plan.

Put Multiple Cars On One Policy

Many auto insurance carriers have “bundle plans” that allow you to insure more than one car under one policy. This can help you save money rather than going through multiple companies.

Ask About Military Discounts

As a thank-you for serving our country, many companies will give a military discount for those currently enlisted or veterans. Be sure to ask and see they have any options for you.

Overall, understanding auto insurance helps you to save money (or avoid wasting it) by knowing what to look for or mistakes you can prevent. Hopefully, with this knowledge, you’ll be able to find the best coverage and plan for you.

What would you add to the list? 

How to Save on Your Auto Insurance

auto insurance

Auto insurance companies constantly battle to claim providing the best deals, but only some actually pull through. There are many areas in your life where you can make cuts, and, believe it or not, your auto insurance is one of them.

A year after I graduated college, I had my first taste in shopping around for new auto insurance companies. I felt I was not receiving the promised rewards of my plan at the time, and despite reaching out to my representative, no changes were made. After doing some extensive shopping around, I cancelled my plan and went with a new company. This reduced my monthly payment by roughly $60. Needless to say, I was very happy I took the time to do some research.

Many individuals tend to forget to reevaluate their car insurance. They are so focused on their car and having this investment protected that savings could be easily missed, which is completely understandable. But, when working on improving your personal finances, leave no stone unturned.

Just because you already have a policy does not mean you can’t still shop around. Finding the best quotes is key to auto insurance savings. These insurance quotes from reliable companies will be the primary tool you need to leverage change in what you pay. Keep in mind that the estimates you choose should be from a comparable plan to your existing one.

So, let’s get started and get you the savings you deserve with these quick tips.

Don’t limit yourself

There is no cost to getting an auto insurance quote, so don’t limit yourself to just one. In fact, get as many as you can to really help you evaluate your options and to present these estimates to your current company. Performing a thorough research is the first step in this process, and a really important one. Ask for referrals from friends and family and consider looking on forums for advice on companies to speak with.

Dig deep and know your auto insurance needs

Referrals are great, but you still need to research the company to make sure it is a good fit for you. Know what you need in a policy. What is the companies’ coverage like? What are their policies on accidents, speeding tickets and so on? Do they offer forgiveness plans? Do they primarily work online or are they very personalized in their customer service? Knowing all the background information and fine details are important in your savings journey.

Raise your deductible and have good credit

You may need to raise your deductible in order to lower your premium. As companies begin to run quotes for you, they will also look into your credit score, so just be prepared for that. If you need to improve your credit standing, this recent article published right here on Suburban Finance may help.

Try to stick to online searches

Although agents will generally always be available to speak with you, you may be presented with additional costs to meet and talk with them. Not to mention, this will also take up a lot of your time. Try to do as many online searches as you can without speaking to an agent. Should you need to speak with someone for more details, there are some companies who do have online chats or will offer a complimentary phone call with a representative.

Bring multiple cars together

If you have more than one vehicle, consider placing them all under the same policy. This will bring you even more savings.

Overall, the goal is to weigh out your options to make sure you are getting the best deal for you and your budget. Customer service is huge for me, so when my previous auto insurance carrier failed to look into my issues with me, I decided to move on. If your company is willing to make changes to better suit your needs, they may be the best option you.

Never be afraid to look into things and ask where you can save. The answers are out there; you just have to look for them.

What tips would you add to the list?