Mayhem, the Gecko, and a girl named Flo
In this era of frugality, advertisements promising cheaper car insurance are everywhere. “Flo” from the Progressive Insurance ads promises you she will get you better rates with her low pricing tool and has recently taken up acting, writing and singing her own—terrible—songs. “Mayhem” from Allstate uses fear as a motivator by showing the damage he can do if you’re uninsured and unprepared. And Geico’s gecko—well, he’s cute and has an accent.
Nearly every state requires that drivers have car insurance. Since everyone who gets behind the wheel is required to be insured, or able to foot the bill in case of an accident, insurance companies are fighting for your business. Using mascots like a flying pig and Snoopy, these companies are catching consumers’ attention, dominating social media, and convincing drivers to switch.
Still, car insurance rates have nothing to do with a caveman or a “low pricing tool.” Some are never swayed by clever commercials and choose to stay loyal to the same company they have used for decades. Though loyalty can bring discounts, “accident forgiveness” and a “vanishing deductible,” it never hurts to examine your policy and your situation for extra savings. Let’s look at some factors that can affect your rates and help you save money on car insurance.
Old Car, Full Coverage
Are you still driving an old clunker but haven’t changed your coverage since it was new and shiny? Your car’s worth has diminished over the years. Consider dropping collision and comprehensive coverage because if your car is wrecked, you may not want to put the money into fixing it.
High vs. Low Deductible
What is your deductible? Some people need a low deductible because of their financial situation. But if you have the means to pay a higher deductible if you are in an accident, you could save money on your monthly rate by raising that amount. For example, if you have a $100 deductible but could easily pay $500 if you are in a wreck, you could save on your monthly rate by choosing the higher deductible. This is especially useful if you’re a safe driver and are accident-free.
Do you really need to pay for roadside assistance? Having someone to call when your car breaks down is a necessity, but there are free services abound that could save you cash. Some cell phone providers and credit card companies offer free or discounted towing that might be cheaper than what you currently have. Your car’s manufacturer may also offer free roadside assistance. Check your policy and see if you can save money by switching, or removing coverage.
Rental Car Coverage
Did you add rental car coverage years ago, but your circumstances have changed? Maybe you purchased a second car, or have access to your spouse’s car in case yours is damaged and in the shop. If so, ditch the extra coverage and save some money.
More Ways to Save
Speaking of marriage, life changes can also reduce your rates. Have you recently married and your spouse has a car? Ask your agent about a multi-vehicle discount. Some insurers offer better rates to married people. Also consider combining your other insurance policies such as your home or renter’s insurance. Many companies offer discounts if you have more than one type of policy with them. Some auto insurers will even give you a discount if you get a degree or get a better job.
Having a birthday could also help you save money. Most auto insurers offer lower premiums to drivers between the ages of 25 and 55. If you are an older driver, or new to the road, you have the opportunity to take classes to reduce your rates. Some insurers offer discounts to teenagers who have completed a driver’s education course at school. AARP offers classes to older drivers and many insurers will offer a discount to those who have completed a class.
Competing for the prize of “Most Clever Commercial” are the ads for free credit reports. The two actually have something in common. Your credit score can affect your car insurance rate because insurance companies base your ability to make monthly payments on your credit score. Improving your credit score by paying your bills on time can help lower your car insurance rates. You can also reduce your premium by making larger payments or making a larger down payment.
No matter what car insurance company you have, it’s a given that if your driving record is clean, you will get a better rate. Numerous speeding tickets, at-fault wrecks and other violations are all red flags for insurers and result in higher rates. Drive safely and you will see the savings on your car insurance bill—while protecting yourself from “Mayhem.”
This article was written by staff writer Kim Sloan. Her mission is to help fight your evil debt blob and get your personal finances in tip top shape.
Copyright © 2013 Kim Sloan