Car insurance is a driving expense that you certainly appreciate if your car is broken into, stolen, or you are involved in an accident. Without it, you may face significant expenses after a car accident with car repairs, medical expenses and more. However, you also do not want to pay a fortune on your car insurance premium. Here are a few steps that you can take to avoid being car insurance poor.
1. Buy a car which is affordable to insure
If you have plans to trade in your current car for a new car in the coming weeks or months, consider researching cars which are affordable insure. A Nissan Micra is going to be significantly cheaper to insure than a new Audi A4. Carsales.com.au has a useful tool which helps you calculate which insurance group your car falls into. Everything from the power of the engine and the replacement value of the car, to the power of the engine can affect the cost of your car insurance. Before you finalise your decision about which car to buy, be sure to contact your insurer and get a specific quote for insuring the new car. It may benefit you to compare the insurance cost of the top two or three models that you are considering against each other.
2. Buy only what is needed
Your car insurance coverage can save you a lot of money when you need to file a claim, but some coverage is simply not necessary for some drivers. Consider researching the minimum coverage that you are required to purchase by law. If you have a car loan in place, research your car lender’s requirements. If you have a high value car, you may also benefit from purchasing a comprehensive policy now, however, as the value of your car decreases, the benefit of a comprehensive policy will also decrease. For many drivers with lower-value cars, a liability or collision policy will suffice and will save money on the car insurance premium.
3. Shop around for the lowest insurance rates
You may have heard that comparing insurance rates between insurers can help you to save money on this expense, and this is entirely true. Comparing car insurance may not be as commonplace in Australia (in the UK, 80 per cent of all car insurance policies are arranged via comparison websites), but it does work. You can gather eight different car insurance quotes, and you will likely have eight different premium amounts to choose from. While you want to choose a company which offers the lowest premium, you also want to choose insurance from a reputable and dependable insurance company. When you need to file a claim, you want to ensure that your insurance company will not hassle you or fight you over the claim.
Click NEXT to find out how else you can save on car insurance
4. Maximise the use of discounts
With most insurance companies, drivers usually qualify for at least one or two different discounts, and these can help you to save money. However, there are a few other discounts that you may need to take extra steps for which to qualify. For example, you may need to take a driver’s education course to qualify for a safe driver discount, or you may need to move your homeowner’s insurance to your car insurance company to benefit from a multiple policies discount. Take advantage of as many discounts as you can to reduce your premium.
5. Choose the right excess amount
A high excess will yield a lower premium. However, many drivers have selected an excess that is so high, it becomes unaffordable to file a claim. Your insurance premium should be affordable, but it should also be affordable for you to file a claim when needed and to actually use your insurance to your benefit. Choose the highest excess amount that is affordable for you to lower your premium.
6. Drive safely
Your driving history is a major factor that is reviewed when you get an insurance quote, and it can affect adjustments to your premium with each renewal. Safe drivers enjoy lower premiums, and they also may qualify for safe driver discounts, no claims bonuses and more. Each time you get into your car, buckle up, drive the speed limit and obey all traffic signs posted. If necessary, take a defensive driving course to learn how to watch out for hazards on the road as well as other drivers who may cause an accident.
By following these steps, you can enjoy the lowest insurance premium possible and avoid being car insurance poor!