Dollars and Sense – How to Know if You’re Paying Too Much for Car Insurance

Dollars and Sense - How to Know if You're Paying Too Much for Car Insurance

With the current tough economic times, everyone is looking for ways to save a buck, and car insurance is one area where you could be losing money. 

While car insurance laws vary from one state to another, it is important to carry auto insurance because it can help offer financial protection in an accident by deflecting liability in an accident where you are at fault. However, you do not want to pay too much more than what is necessary for car insurance. 

If you want to know if your insurance policy is too costly, keep reading to learn more.

Compare Quotes

Comparing insurance quotes from different providers is the first step in determining if you are paying too much for your car insurance. Considering there are thousands of car insurance companies in America, comparing quotes may seem like a much easier task but it is not. 

The best thing to do is leverage online car insurance comparison resources, such as iSelect car insurance, to get the best market rates for your circumstances. When getting quotes from insurers, it is important to understand that your circumstances can attract different prices from different insurers. For example, insurance companies will offer different rates for drivers with a DUI conviction. 

Comparing quotes should never be a one-time thing. Insurance rates change now and then as insurance companies adjust to meet market demands, so do your shopping every year before renewing your coverage.

Review Your Coverage 

The amount of coverage a driver needs depends on several factors, such as your state’s legal requirements, the value of your car, its age, and your neighborhood. When circumstances change, so should your coverage. For example, as your car ages, it may not be worth getting comprehensive coverage

At other times, drivers will have add-ons they do not need. For example, you could have a roadside assistance add-on while still having AAA, which would mean your add-on is unnecessary. So take your time to review your policy and determine what you need and what you need to drop based on your circumstances. 

Review All Discounts Offered By Your Insurer

Insurance companies offer several discounts as a way of attracting and keeping customers. Sometimes these discounts may not be obvious, and your insurance agent may not tell you until you ask. 

Some of the most common discounts include household car bundling discounts for household cars insured under one policy, good driver discounts offered to drivers with a clean accident record, and safe car discounts. The good thing is you can qualify for more than one discount, which can translate into quite some savings. If you haven’t asked for discounts in the past, now is the time to ask.

You Are Driving Much Less

One of the factors insurers look at when determining a customer’s risk rating is the miles driven. If your traveling needs have declined drastically, you could be paying more than you deserve. The insurance company may not know that your traveling needs have gone much lower, so you have to inform them. Sometimes an insurance company may extend a discount for drivers with fewer miles. At other times they could advise you to carry mile-based car insurance coverage. 

If you go for mile-based car insurance, the insurer will have a tracking device installed on your car and then rely on the data collected to determine the miles traveled and charge you based on that. This option is excellent for people who rarely use their car or drive short distances to and from work or school. 

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