Reducing cost of Car insurance:

Car insurance has many components that provide coverage for different situations. For those polices that are mandatory by law you do not have much of a choice but to acquire them. For the rest though, you have to pick and choose the ones that suit your particular needs and provide you enough coverage.

You need to shop around to see what is available and at what price. Ask questions from your sales agent (or ask questions through email) remember as a customer you are the boss. Besides, you need to know how, when etc. your will be compensated.

By increasing your deductibles, you can save money on your premiums: This involves risk though. You have to do some proper risk management before deciding for this option. If you are confident and think you can absorb the worst-case scenario out of your own pocket, then you should opt for this option. You can select higher deductibles with different components/parts of your car insurance but be smart do not overdo it may cost you significantly. The main point of focus is that you will have to establish a balance between “potential loss” that you might incur in the future versus the cost of the policy that you will need to pay now. Previous record of your driving skills and other similar things can help you in determining the right level of deductible.

Cost reduction rules vary from one insurance company to another but most offer reductions on car insurance premiums for the following:

Garage Parking:

If you park your car in a secure garage facility, you can get huge discounts on your premiums. Some insurer offers discount of up to 20%. Insurance companies offer this price cut because they realize that Garage being a relatively much safer place, reduces the risk of theft significantly. By parking the car in the garage the chances to sustain accidental damages and/or damages due to vandalism etc. reduces greatly.

Non-Smoker:

Some companies offer discounts on car insurance policies for non-Smokers. Smokers are considered as high-risk individuals because among other things, smoking while driving can make the driver lose concentration and consequently can be a source of an accident.

Insuring two cars from a single insurer:

There are car insurance plans that offer discount if you insure more than one car. This is simply due to the same old principle on which insurance companies work game of odds. By insuring multiple cars, the insurer spread the risk between more cars and therefore can offer discounts.

Apart from individuals who have more than one car, this gives relief to, newlyweds who previously had their separate car insurance but after the wedding can enjoy this discount by choosing a single insurer. Discount rates vary from company to company.

Reduce your car insurance premiums by buying a conservative car.

Note that car insurance premiums vary significantly for different make and models of the cars. One obvious reason for this difference in cost is directly related to the value of your vehicle. In addition, insurance companies classify automobile base on other factors as well. For example there are certain models of cars that are considered more prone to damages because of their inferior body material or engineering etc. There are also cars that are very expensive to repair. There are some cars that insurance companies will not insure at all due to very high risk factor involved in terms of repair or replacement cost. Several insurance companies publish car ranking based on their risk assessment.

Safety gadgets on your car:

Premiums on your car insurance can significantly go down if your car is equipped with devices/gadgets that can help reduce the risks of a car accident etc.

With the latest advancements in the field of Engineering and technology, there are now numerous devices installed in a car to help us have a secure driving experience. There are add-on devices/gadgets as well, which you can make your car a better vehicle and which you can install, as and when required. These devices range all the way from a simple burglar alarm to a sophisticated Car monitoring system through GPS. Installing these types of devices in your car means that you are reducing the risk factors attached with your car – i.e. decreasing the probability of damage/accident/theft etc.

In other words, by equipping your automobile with safety and precautionary machinery/devices you are helping your insurance company to make more money on your policy. It is therefore; only fair that your insurer gives you an appropriate discount on your policy based on the level of security your car is equipped with.

Defensive driving course:

You can also qualify for reduced premium rates if you attend a state approved Defensive Driving course.

Reduce premium for early retirees:

There are insurance companies that offer reduce premium rates for people who get early retirement. People retiring at around 55 years of age group are considered as low risk drivers. This is because generally these people are mature and stable - and are not in hurry, which significantly reduces their risk factor.

Drop redundant coverage:

See if you really need both comprehensive and collision car insurance. If your car is old and you do not use it much then is it best that you drop either collision coverage or comprehensive insurance i.e. each one of them become redundant in the presence of another. This is because the premiums are usually higher than the actual value of the car.

Buy different insurance policies from a single company:

Well it has advantages and disadvantages. The advantage is that if you buy different policies from a single company, they will give you certain special discount etc. Many may offer you combine insurance polices for home and automobile so on and so forth.

On the other hand, if you choose one insurer then it can be considered as putting all your eggs in one basket. Just for argument sake, if your insurer goes bankrupt - all your policies goes down the drain. Then (on a more realistic basis) there is a possibility that at some point in time you may want to switch your say car policy to some other insurance company then what effect (discount wise) would it have on the other policies that your insurer is carrying for you etc.

Actually, the option of getting different policies from a single insurance company is a good approach. You will have to conduct some thorough research beforehand regarding company’s financial standing and practices, so as to protect your interests – but then you have to do that anyway for any insurance company from which you are to buy insurance whether one or more