How Can I Lower My Insurance Costs?
A question many of us ask ourselves when thinking about our insurance policies is; how can I lower my costs? Well don’t you worry, we have put together a list of ways you can start saving today: Increase Deductible One of the easiest ways to lower the premium you pay for your insurance policy is to increase your deductible. The deductible is your share of the cost when a claim occurs. By increasing the amount you pay, insurance companies will lower the rate they charge you for your premium. This occurs for two reasons:
- You are incurring more of the costs when a claim occurs so they don’t have to pay out as much.
- If there is a claim that is less than the amount of your deductible you will be responsible. For example if someone sideswipes your car in a parking lot and the damage is $400 and your deductible is $500, you will just cover the cost because if you put in a claim; it appears under your name that you have a claim and may no longer be eligible for a claims free discount and you have to pay $500 out of your own pocket anyway. It is important to note that in some instances you will not have to pay a deductible if you are not deemed at fault for the accident by your insurance company.
Another way to lower your costs is to bundle your home and auto with the same provider. This is known as a multi-line discount and most insurance companies will provide you with a discount if you pair your home and auto with them. In many cases receiving this discount makes sense, however you should still shop around because in some cases you can find prices that are lower from separate companies and still provide all the coverage you require.
Do you own an older vehicle? If that is the case it might make sense to drop the collision coverage on your vehicle. Collision coverage is used to cover your vehicle in the event of a collision or upset that you are at fault for. Alright, so why get rid of it for an older vehicle couldn’t I still be at fault for an accident? Yes of course, but it will lower your premium for starters, and in the event that you do get in an at-fault accident with your old car that is only worth a few bucks you are only going to be indemnified up to the value of your car (a few bucks). Remember insurance companies are there to indemnify you, meaning they will put you back to the same financial position just prior to the loss, no better, no worse. If your car is only worth a few bucks you would only get a few bucks back in the event of a collision and often it makes more sense to drop collision.
Low Insurance Rating
Buy a car with a low-cost insurance rating. What in the world does that mean? Well you see, each insurance company classifies cars using several categories. These categories consist of factors such as average cost of the vehicle, cost to repair, and cost of bodily injury (how safe it is in the event accident). As you can imagine these factors could differ greatly from vehicle to vehicle. Small cars are typically easy to repair however they do not rate as well as a truck when it comes to bodily injury. Driving a fancy, pimped out sports car is going to have a much higher insurance rating when it comes to cost of vehicle and repair than a regular car would. I realize everything I just said didn’t really help you actually figure out what vehicles are good so here is a list of the Least Expensive Top-Selling Cars to Insure (Alternate ending: 10 Cheapest Vehicles to Insure for 2015):
- Jeep Wrangler
- Jeep Patriot
- Honda CR-V
- Dodge Grand Caravan
- Honda Odyssey
- Jeep Compass
- Subaru Outback
- Ford Edge
- Smart Fortwo Coupe
- Ford Escape
You will notice there are a lot of SUV’s and that makes sense when you think about it, they fall into the middle ground of safe in the event of an accident and not overly expensive. Each insurance company has a slightly different rating and each driver is different. This list is based off an unmarried 40 year old male driver, with no accidents.
The Best Way
All of this information is great and will hopefully lead to you finding a better insurance rate. However, the BEST way to save on insurance is through the use of an insurance broker. At McDougalls we always have the clients best intentions in mind and do everything we can to ensure you are finding the best coverage for the best price. After all we have access to the largest insurance market for any broker in Eastern Ontario, with the ability to find prices from over 20 insurance companies. If you are interested in receiving a quote or would like to talk to one of our brokers today give us a call at 1-800-361-0941 or fill out the form below: