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10 Things You Need To Know About Car Insurance

By Edited Jun 6, 2015 0 0

Car insurance represents, for most people, one of the highest household costs. Since it's compulsory in many countries, there's no way to avoid spending money on it. This is, at the same time, a good and a bad thing as, in case of accident, you'd have to pay any damage yourself if you were uninsured. So, is there a way to mitigate the pain of such "necessary evil"? The answer is yes. By following these suggestions, you could see your insurance premium greatly reduced.

1. Keep a good driving record
This is the single most important advice. A good driving history is crucial to pay a low premum. Accidents and convictions are written on your driving record, and, in best case, are kept for many years. They are readily available to insurance companies, which will surely charge extra if your record is bad.

2. Get a quote from more than one insurer
Some people believe that, given the same driving record and choosing the same coverage, every insurance company charges the same amount. This is not true, the difference can vary significantly. This is because the risk of insuring you is assessed varies from company to company. Parameters like the location where you live, your driving history, the type of car and so on are considered differently. It always pays out to get multiple quotes and compare them, before making a choice.

3. Brokers are not always the best choice
Brokers can often offer an insurance policy at a discount, but they don't necessarily often the best price. This is because they get quotes from a limited number of insurances, i.e. only the ones they chose to do business with. For this reason, don't assume that the broker did the step 2 on your behalf, as it won't be true. Contact several brokers, and compare the quotes you get with the ones you found by yourself.

4. Consider increasing your excess
The "excess" (also called deductible) is the amount of money you'll have to pay out of your pocket before an insurance will cover any damage related to a claim. A higher excess will result in a lower premium, as this will mean that the insurance won't have to pay anything for minor accidents such as scratches and dents. However, it's wise to calculate how much would you be able to afford paying yourself and set the excess accordingly.

5. Review your coverage and check if you can reduce it
Usually, when buying a new car, it's a good idea to choose the best coverage. This is especially true if the car is expensive. However, the value of your vehicle will decrease with time, and comprehensive coverage would not be worthwile. In such case, lowering it to 3rd party, fire and theft could significantly reduce your premium.

6. Consider the model and age of your car
The model and age of your car are another important factor that insurance companies consider when calculating your premium. A new car would be more expensive to insure than an old one, and a fast sportscar would be even dearer, due to increased risk of theft and accidents. Safety ratings of the vehicle are also taken into account so, if you are going to buy a car, make sure you consider all these factors.

7. Don't be shy, and ask for a discount
Many people feel uncomfortable with haggling, but you should overcome this feeling and do it. Insurance companies are used to be asked for discounts and, in worst case, the only thing that will happen is that they will say no.

8. Evaluate the possibility of getting "no claim bonus" coverage
The "no claim bonus", or "Accident forgiveness" coverage could save you a lot of money in case of accident if you have a long, clean driving record. A 5 year clean driving record could give you a 50% discount or more; this would be lost if you have an accident and you are at fault, with the result that, from next year onwards, you could have to pay a huge increase. The no claim bonus coverage will allow you to retain your clean record in case you have an accident (some companies allow up to two accidents in a three year period).

9. Value of loyalty is overestimated
While it's true that most insurance companies will give you a discount if you have been with them for several years, this is not a good reason not to shop around as described in point 2. This is because, sometimes, even with the discount you would receive, you'd end up paying more with your current company than with a new one, particularly because other companies have all the interest in taking you away from their competitor. So, once again, don't be lazy and, most important, don't feel ashamed of leaving your current insurance.

10. Check the possibility of attending an Advance Driving Course
Advance Driving Courses are available to drivers with any level of experience. In such courses, trainers will teach you how to react in case of unforeseen events, such as large puddles of water in the road, ice, snow, animals crossing, and so on. The training is safe, as it's performed at low speed, and it will improve your driving skills. Even better, it could earn you another signicant discount.



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