Auto insurance is a part of owning a vehicle that cannot be escaped.
It helps protect drivers against unforeseen disasters such as theft, vandalism, and accidents that can be really costly out of pocket.
Your auto insurance rate is dependent on a lot of factors not limited to geographical location, age of the driver, type of vehicle, driving history, and even occupation in some cases.
When you do find a yearly plan that works with your budget, your goal moving forward should be to look for opportunities to lower your rate with each passing year.
It all starts with taking the right steps at the very beginning of your auto insurance shopping process. Tyrone Murray, auto insurance agent for Allstate Insurance, shares a few pointers.
“Customers seeking auto insurance tend to quickly look for savings in the price of the yearly premium itself rather than the overall package. This can lead to a loss in future savings for that customer who chooses a cheap insurance policy that saves costs initially but does not reward over the long term,” he says.
Murray lists Allstate’s Platinum Plan for auto insurance as the go-to plan for consumers really serious about saving on their insurance rates in the long run. Using a hypothetical situation, a typical driver over the age of 25 with a decent driving record and living in a busy city such as Philadelphia can expect to pay approximately $1,400 per year. Picking a plan like the Platinum Plan can add $50 to $100 more to your approximate total yearly payment initially, but what happens afterward is interesting.
The Platinum Plan comes with a few advantages, mainly a multi-accident forgiveness program that protects your rate from increasing should you ever be involved in a collision. But it doesn’t stop there. For every six months in a year that you are not involved in a collision, the plan rewards you with a check of your current agreed deductible on the same plan. So in a year, you can end up recouping the extra amount of money you spent purchasing the plan initially. Subsequent years will find you accumulating checks of your deductible as long as you maintain your accident-free driving record.
Other companies such as Geico Insurance take a slightly different approach. The auto insurance policies with this company offer a maximum of 25 percent savings on yearly premiums for a driver who has been accident-free for five years. Also, Geico offers an additional 10 percent to 15 percent discount on your yearly premium if you are a member of an association or group that has partnerships with the company. Geico’s website lets you do a search of all potential organizations to check if you are eligible for any discounts.
Geico also acknowledges vehicles installed with sophisticated anti-theft systems and offer discounts depending on the particular make and model of the vehicle. So if your car comes with an advanced security system, speak up and let them know. Some providers also give discounts if you’ve taken a defensive driving or safety course recently or if you use winter tires in the colder months.
Liberty Mutual Insurance also provides an auto policy with a program called the Deductible Fund. With this feature, Liberty Mutual deposits $100 into your bank account at the start of your insurance policy. An additional $100 is then added for every year you keep the Deductible Fund on your policy. Eventually, you can completely eliminate paying for your deductible on your policy once you have accumulated enough dollars on your Deductible Fund to pay for the original deductible amount on your auto policy. Another benefit of this program? Even if you are involved in an accident under this program, the deposit of $100 into your fund account is not affected.
In addition to the general tips such as driving carefully and using the right type of tires for the given season, you can dig deeper into an auto insurance policy that interests you and look out for features of that policy that assist you in saving some money in the long run. You should be reviewing your policy every year and shopping around to ensure you’re saving the most money.