Insurance is an extremely important tool for every household, and cushions the blow in a number of unfortunate incidents such as a death, disability, theft or an accident. Not only does it act as a safe plan in case of something going vary, it is also extremely useful as it can save you hundreds of dollars in case of an unfortunate event. It allows a household to live stress-free, and not having to save up in case of an unfortunate event in the future.
Out of all the possible insurance policies available in the market, auto insurance is probably the most important one of all of them. Most accidents happen when individuals are driving and a great amount of people who find themselves in accidents suffer great losses and injuries. If the cost of repairing their vehicle wasn’t enough already, they are also stuck with paying for their medical expenses and hospital bills and what not.
What is Auto Insurance?
Auto Insurance essentially refers to any type of motor insurance that covers all losses and damages to any vehicle in case of an accident, theft, damage, etc. The premium that an individual may be required to pay on their vehicle may depend on a number of factors including their accident history, their vehicle’s type, age, fuel type, etc.
While the importance of auto insurance cannot be emphasized any further, many individuals who do not live in states where it is required by law to have auto insurance, refrain from getting any. This is because they see it as an added cost. If you look at this shortsightedly, auto insurance is indeed a significant expense. However, if you pay close attention, you’d witness that auto insurance is in fact very profitable and a risk aversive investment in the long run.
In fact, there are certain ways through which one can actually save money by buying an auto insurance policy. Individuals need to do their research and understand the mechanism of insurance and its allotment to be able to save some money by purchasing insurance policies. One of these is the practice of making claims, and individuals need to be aware of how they can draft their claims to receive rightful compensation.
How Can You Save Money With Auto Insurance?
There are a number of ways you can save money with auto insurance which require you to be smart and pay close attention to your insurance policy which include:
1. You can bundle your policies
Individuals often have multiple policies such as auto insurance, home insurance and health insurance. Many insurance providers provide an option to bundle insurance policies, that allow the individual to reduce their overall combined premium and hence save money in the process. Insurance providers who fall under the umbrella of a holding company and have multiple other businesses too, often offer cross discounts for customers of one of their businesses to invite them to other businesses for instance auto insurance for Costco members by Costco’s insurance company.
Insurance companies also offer these discounts because it is generally easier to sell multiple policies to the same client and saves them a lot in customer acquisition and administrative cost.
2. You can improve your credit rating
Your credit rating, also known as your credit standing can typically affect how much you pay for your insurance premium. Your credit insurance score, which ultimately decides your insurance rates and premiums, is based on a number of factors including your driving history, where you live, and your claims history. If you have a poor driving history, it is imminent that your insurance provider would require you to pay a higher premium and classify you in a high risk category. You can improve your credit rating by improving your driving history and by making your premium payments on time. This combined creates a favorable image of your credit history and hence is likely to improve your credit rating.
Also, if you are bundling up and your policies, if you have a favorable rating in say your home insurance policy, that is likely to positively impact your rating for auto insurance.
3. You can ask your insurance provider for pertaining discounts
Since you are likely to bundle up your insurances, you can ask your insurance provider for a discount on the overall services and for pertaining discounts. This essentially works well if for instance you are performing well in your home insurance file and feel you are eligible for a discount on your auto insurance. You can perform well in your home insurance file by for instance installing a smoke detector in your home, burglar alarms and a security system. Your efficiency in one area of insurance is likely to decrease your overall premium or just your premium for another area of insurance.
Similarly if you also have health insurance, and you work on becoming healthier by changing your diet or incorporating exercise into your daily routine, it is likely to change your BMI and help you reduce your overall premium for all insurances that you have.
4. You can save yourself from a lot of expenses
Money saved is money earned and hence, by having auto insurance you assure that in case of an unfortunate event you would keep yourself safe from paying up hundreds of dollars. For instance, if one fine day your vehicle gets stolen or is the target of graffiti loving kids, you’d either be stuck with a police complaint to no avail or would have to spend hundreds of dollars maintaining your car and getting it un-dented or re-painted.
Additionally, if you find yourself in an accident, by having auto insurance you can ensure that you keep yourself safe from paying for your vehicle’s repair and your hospital expenses. Especially if you find yourself in an accident which is proven to be your fault, you could be stuck with paying for legal fees and compensation if the other party files a court case against you. However, if you have auto insurance, your insurance provider is likely to cover for you and take care of all such expenses.