Actions You Can Take To Cut Your Car Insurance Costs

With such a wide range of factors involved in an insurance quote it makes sense to compare policies online before buying to ensure you find the cheapest deal. But understanding the basis on which your insurance premiums are quoted can go a long way to helping you lower them. In most cases there are many ways you can reduce your premiums beyond the savings you find online.

Insurance companies determine your premiums by assessing your likelihood of posing a risk to them, i.e., the risk that you will file a claim. This is called risk assessment. Drivers under age 21, and in some cases, drivers under 25, especially men, are more likely to be involved in accidents, so they pay much higher premiums. There are a couple things all drivers, including younger drivers, can do to lower their risk assessment and therefore, their insurance costs.

Two Things Younger Drivers Can Do

Take a safe driving course, which educates younger drivers on appropriate defensive driving on all types of roads, both during the day and during the night. The amount you save on your premium will make it well worth the price of investing in the course.

Another thing a young driver can do is name an older driver (translation: lower-risk driver) as an additional named driver (not the main driver) on the policy. If that person will be driving the car at least part of the time, it lowers your premium. However, be aware that the young driver must be listed as the main driver, with the older driver as an additional named driver. If the younger driver is the main driver, but is listed secondary on the policy, the insurance company may not honor your claim, plus you can incur points on your licence.

Things All Drivers Can Do

The type of policy you choose can make a difference. A policy called “third party, fire, and theft” covers less and therefore costs considerably less than a full comprehensive package. It is important to understand the differences, though, and to ensure you are covered for everything you want to be.

You might also consider lowering the worth of your car on your policy, even by just a few pounds, since that could put you in a less expensive premium bracket.

Consider raising your excess - the minimum payment you must contribute to any claim. This can make your insurance considerably cheaper but could result in higher costs in the result of an accident. As always, it is a balancing act.

Let your insurer know if you use any alarm device (such as an alarm, an immobilization device, or a remote start). Where you regularly park, whether in a garage or on the street (where your vehicle is at greater risk of vandalism and theft) can make a difference in your costs.

Drive less, carpool, walk, and take public transportation when you can. Lower annual mileage can lower your premium.

Adding alloy wheels and other modifications makes it more costly to replace those parts, and can raise your premium.

Each time your insurance policy renewal time comes around is the time you should ask your current insurer if you qualify for any accident-free or 'no-claims' discounts.

Finally, shop around. Before you purchase a car, contact your insurance company and ask for an estimate. More expensive cars, cars with bigger engines, and cars with soft tops can cost more to insure. Continue to shop around at policy renewal time. Just because you’ve been with a company for a year doesn’t mean you’re getting the best rates.