How to Keep Your Car Insurance Rates Low

Are you one of those people who complains about being "insurance poor?" After a person pays for health, life, car, property and other assorted insurance policies, it can leave a major hole in the bank account. Often, car insurance takes the biggest bite out of your disposable income. Finding a way to lower this cost can be one way to improve the household cash flow issues. Here are five areas to consider when trying to find a way to reduce the price of car insurance.

Own fewer and older cars that only require liability insurance.

Every time that you add a car to your insurance policy, the cost will take a big jump. If you own one car and move up to two automobiles, the insurance cost may more than double. By selling any cars that you insure but do not drive much, your insurance rates can be reduced dramatically. By driving slightly older cars that you do not have to finance to buy, you can consider buying only liability insurance and avoid the cost of collision insurance. You should find that this will cut your insurance expenditures by at least one third.

Keep young drivers off of your policy.

Car insurers do not like drivers who are less than twenty-five years old. Because of this, they charge a much higher rate for cars that are going to be driven by these drivers. In many families, it is hard to completely keep young drivers from behind the wheel. You might want to explore having them put on as a part-time driver. Another option that many families employ is to require younger drivers to earn the money to pay for the extra premium costs on the car insurance. The insurance is not actually cheaper, but the additional income to the budget offsets the higher price.

Buy only the minimum coverage required by the state.

All states require drivers to insure their cars with liability insurance to protect the property, potential medical costs and cars of other people. However, not all states require the same level of liability insurance. Agents will try to sell you amounts that are generally higher than the state minimums. They will tell you that the state requires too little coverage to give you adequate protection. While this may be true, it also costs more for the higher liability coverages. By knowing your state's requirements, you can keep the agent from selling you excessive coverage. This will result in savings for you.

Leave off all of the extras.

Not only do agents encourage you to buy extra liability insurance, they will also try to get you to add other options to your policy. You may choose to purchase some of these, but if you can resist, the savings can be significant. Instead of buying towing insurance, just develop the habit of keeping an extra hundred or so dollars handy to pay for the tow that will probably only be needed every five years or so. The same is true for other types of road hazard insurance. Unless you are a really bad driver, the rental car option while your car is being repaired usually costs more than it is worth. If you can look around for the right body shop; they might furnish a loaner car while they repair yours.

Check rates from several companies every six months.

Because of the large number of car insurance companies available, some of them are changing their rates just about every month. By checking rates every six months or so, you can verify whether you have the best car insurance rates available. It should only require about an hour of your time on the phone to do this. This one hour could save you a hundred dollars or more. At the same time, consider raising the deductibles on your policy if you carry full coverage.