Maximizing Your Auto Insurance Coverage: Strategies To Save On Full Cover

Auto insurance is a necessary expense for all drivers, but it can be costly. Full-coverage insurance is even more expensive, as it combines liability, comprehensive, and collision insurance to cover most scenarios. However, there are several ways to save money on full-cover auto insurance. Firstly, shopping around and comparing rates from different insurance companies is crucial. Prices vary significantly between insurers, so obtaining multiple quotes can help find the most competitive rates. It is recommended to get at least three quotes from different companies and types of insurance companies. Additionally, increasing your deductible can lead to significant savings on your premium. A higher deductible means you pay more out of pocket in the event of a claim, but it can result in a lower overall premium. Another way to save is by taking advantage of discounts offered by insurance companies. These include discounts for low mileage, multiple policies, loyalty, safety features, profession, and good student grades. Improving your credit score can also lead to lower insurance costs, as insurers often use credit information to price policies. Finally, consider the type of car you drive, as safe and moderately priced vehicles, such as small SUVs, tend to be cheaper to insure than expensive or flashy cars. By combining these strategies, drivers can save a substantial amount on their full-cover auto insurance.

Shop around for the best insurance rates

Shopping around for the best insurance rates is a great way to save money on your full-coverage auto insurance. Here are some detailed tips to help you get started:

Get Multiple Quotes

It's important to get at least three quotes from different insurance companies and different types of insurance providers. This includes companies that sell through their agents, independent agents, and those that sell directly to consumers. By comparing quotes, you can find the most competitive rates and save hundreds of dollars on your insurance premiums. Remember to compare rates and coverage options on an "apples-to-apples" basis to make an informed decision.

Do Your Research

When getting quotes, it's essential to understand the basics of auto insurance so that you can ask prospective insurers informed questions. Remember, you'll be relying on them if you ever need to make a claim, so make sure you're comfortable with the service they provide. Check your state insurance department or consumer information sites for data on consumer complaints to help you choose a reputable company with a good track record of customer satisfaction.

Consider More Than Just Price

While getting a low price is important, it's not the only factor to consider when choosing an insurance company. Make sure the company you select is reputable and offers the coverage you need. The lowest price might not always be the best option if the service is lacking or if there are issues with claim payouts. It's a balance between finding a competitive rate and ensuring you have the protection you need.

Ask for Recommendations

Don't hesitate to ask friends and family for their recommendations based on their experiences with different insurance companies. Word-of-mouth referrals can provide valuable insights into the quality of service, claim handling, and overall customer satisfaction. Their first-hand accounts can help you make a more informed decision about which insurance provider to choose.

Review Your Coverage Regularly

It's a good idea to review your auto insurance coverage at least once a year or whenever your policy is up for renewal. This ensures that your insurance remains aligned with your needs and that you're not paying for coverage you don't require. Life changes, such as moving to a new location, getting married, or changing your vehicle, can impact your insurance needs. By regularly reviewing your coverage, you can identify areas where you may be able to save money or make necessary adjustments to stay protected.

Compare Insurance Costs Before Buying a Car

If you're in the market for a new car, be sure to factor in insurance costs. Auto insurance premiums are based on various factors, including the car's price, repair costs, safety record, and the likelihood of theft. Certain vehicles may qualify for discounts if they have safety features or are known to be low-risk for theft. By researching insurance costs for different cars, you can make a more informed decision about which vehicle will not only suit your needs but also be more affordable to insure.

Take advantage of discounts

Saving money on full-coverage auto insurance is possible if you take advantage of the many discounts offered by insurance companies. Here are some common ways to save:

Low Mileage Discounts

If you drive fewer miles per year than the insurer's specified number, you may be eligible for a low mileage discount. This discount also applies to carpoolers.

Multiple Policy Discounts

You can often save money by bundling your auto insurance with other types of insurance, such as homeowners, renters, condo, life, motorcycle, boat, or RV insurance. Insurers typically offer discounts for purchasing two or more types of insurance from them.

Loyalty Discounts

If you've been with the same insurance company for several years, you may be eligible for a loyalty discount. Even if you're new to the company, some insurers will reward you for maintaining consistent coverage over time.

Safety Feature Discounts

If your car has safety features like anti-lock brakes, airbags, and anti-theft devices, you may qualify for a discount. These safety features reduce the risk of car theft or personal injury, so insurers often reward their customers for having them.

Profession-Based Discounts

Some insurance companies offer discounts for specific professions, such as teaching or nursing. Most insurers also provide discounts for military personnel, whether active or veteran.

Good Student Discounts

If you or your teen driver is a full-time student with good grades (usually a B average or higher), you may be eligible for a discount. This discount often applies to students aged 16 to 25.

Distant Student Discounts

If you have a full-time student on your policy who is under 22 years old, lives more than 100 miles from your home, and doesn't have a vehicle at school, you may qualify for a distant student discount.

Paid-in-Full Discounts

If you pay your insurance bill for the full policy term upfront, many insurance companies will offer you a discount.

Electronic Funds Transfer (EFT) Discounts

If you pay in installments, some insurers may offer a small discount for using automatic withdrawals from your bank account, credit card, or debit card.

Paperless Discounts

With most people preferring paperless billing and documentation these days, this discount isn't as common as it used to be. However, some insurance companies may still offer a small discount for going paperless.

Online Quote Discounts

Some insurers offer a discount if you get an online quote and then sign up for a policy.

Advance Quote Discounts

Shopping around and buying a policy in advance of your current one expiring can sometimes bring a discount. Buying around seven to 14 days in advance tends to be the best time to get this discount.

Occupational Discounts

Your occupation may qualify you for a discount. For example, Liberty Mutual offers special policy features for educators, and Geico offers up to 15% off for military personnel.

Alumni and Professional Organization Discounts

Being a member of certain alumni associations, fraternities, sororities, or professional organizations may make you eligible for a discount.

Usage-Based Insurance (UBI) Discounts

Some insurance companies offer UBI programs that adjust insurance rates based on your driving habits. These programs typically offer a discount for enrolling and then provide additional discounts based on your actual driving performance.

Drop coverage you don't need

Dropping coverage you don't need is a great way to save money on full-coverage auto insurance. Here are some tips to help you decide what coverage you can drop:

Firstly, review your policy and identify any duplicate or unnecessary coverage. For example, if you have two cars, you might not need rental car reimbursement coverage. Or, if you already have roadside assistance through another service, you can remove it from your auto insurance policy.

Next, consider whether you need full coverage or if liability-only insurance would suffice. Full coverage includes collision and comprehensive insurance, which cover damage to your vehicle in an accident or due to other causes. However, if your car is older and has depreciated in value, the annual premium for full coverage may be more than what the insurance company would pay out if your car was totalled. In this case, liability-only insurance may be a more cost-effective option.

Additionally, if your car is worth less than 10 times your insurance premium, collision and comprehensive coverage may not be worth the cost. You can check your car's value using websites like Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar. If your car's value is minimal and your policy has a high deductible, dropping comprehensive and collision coverage could save you money.

Finally, if you have an older car, you may want to drop comprehensive coverage if you have a garage or otherwise protect your car from animals, falling objects, and severe weather. You can also consider dropping collision coverage if you rarely drive, can afford to pay for a new car after an accident, or your car is worth less than your collision deductible.

Remember, before making any changes to your policy, be sure to research your car's value and average repair costs in your area. While dropping unnecessary coverage can save you money, you also want to ensure you have sufficient coverage to protect yourself financially in the event of an accident.

Increase your deductible

Increasing your deductible is one of the most effective ways to lower your auto insurance premium costs. A deductible is the amount you pay out-of-pocket before your insurance company covers the rest of the repairs or replacement (up to your coverage limits) in the event of a claim. By choosing a higher deductible, you can significantly lower your premium costs. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30%. Moving to a $1,000 deductible can save you 40% or more.

However, it is important to ensure that you have enough money set aside to pay the higher deductible in the event of a claim. You should also consider whether you can afford the deductible, as it will need to be paid in the event of an accident. For example, if you have a $5,000 deductible and your car sustains $8,000 worth of damage, you will be responsible for the $5,000 deductible and may be left with an unusable car if you cannot afford the repairs.

Before increasing your deductible, it is recommended to do some calculations to determine the potential savings versus the increased risk. You can speak to your insurance agent to understand the potential savings of a higher deductible. For example, if you currently have a $500 deductible and a monthly premium of $80, increasing your deductible to $1,000 may only save you $96 per year. In this case, it would take almost five years without any claims to make up the difference in the deductible.

It is also important to consider how often you will use your insurance and your risk tolerance. If you are a safe driver with low risk and don't anticipate making frequent claims, a higher deductible may be a good option. However, if you tend to use your insurance more frequently, a lower deductible might be more suitable.

In summary, increasing your deductible can be a strategic way to lower your auto insurance premium costs, but it is important to carefully consider your financial situation, perform the necessary calculations, and ensure you have enough savings to cover the higher deductible in the event of a claim.

Improve your credit score

Improving your credit score can help you save money on full-coverage auto insurance. Here are some detailed, direct, and instructive tips to help you improve your credit score:

• Make on-time payments: Payment history is the most important factor in determining your credit score. Always make payments on time to help build your credit. Set up autopay or calendar reminders to ensure timely payments.
• Pay down revolving account balances: The amount you owe on credit cards and other revolving credit accounts contributes to 30% of your credit score. Aim to keep your credit utilization rate (the percentage of available credit used) as low as possible, ideally below 30%.
• Don't close your oldest credit account: The length of your credit history accounts for 15% of your credit score. Avoid closing old credit accounts, as this can negatively impact your score. Consider using your oldest credit card occasionally or putting a small recurring bill on it to keep it active.
• Diversify your types of credit: Your credit mix, including credit cards, auto loans, and mortgages, makes up 10% of your credit score. Applying for different types of credit over time can help improve your score.
• Limit new credit applications: Each time you apply for new credit, a hard inquiry is made on your credit report, which can lower your score. Only apply for new credit when necessary, and consider prequalification to avoid multiple hard inquiries.
• Dispute inaccurate information: Inaccurate information on your credit report can negatively impact your score. Regularly review your credit reports from the three major credit bureaus (Equifax, Experian, and TransUnion) and dispute any errors.
• Become an authorized user: If you're new to credit or rebuilding your score, consider becoming an authorized user on a relative or friend's credit card with a good payment history. This can positively impact your score, especially if you have a thin credit file.

By following these strategies and maintaining a good credit history, you can improve your credit score and potentially save on full-coverage auto insurance.

Frequently asked questions