You have a bad driving record. It’s not the end of the world, but it costing you a lot of money in premiums every year. You want to lower your auto insurance rates, but you’re not sure how. Unfortunately, your choices are limited. Limited – but not nonexistent.
Safe Driving Classes
A defensive driving class will do a lot to reverse the damage of a bad driving record. Sitting in class, and listening to an instructor for several hours, might not be your idea of fun, but you will learn a few things. You’ll also receive a certificate that usually entitles you to a discount on your insurance premiums.
Most states offer defensive or “safe driving” classes. These classes eliminate points on your license, which is what’s causing the higher premium rates. At the end of the day, you have to ask yourself just how serious you are about reducing your rates. Is 8 hours of class time worth it?
If you drive an older vehicle, you might not need full insurance coverage. Most agents forget to tell you to drop coverage when your car is older than 5 years. If your premiums cost more than 10 percent of the value of your vehicle, then odds are you’re overpaying for coverage. That’s not a hard and fast rule, of course.
It really depends on how much you can get from the insurer if you’re in an accident. Let’s say that you have insurance premiums that are $500 per month. If your car is worth $10,000, it might not be worth paying that much for insurance. At this resale value, it’s easy for damages to exceed the cost of the car – and in most states, if the damages exceed 70 or 80 percent of the car’s value, the insurer must total out the vehicle.
Get a Different Vehicle
If you got into trouble driving a sports car, maybe it’s time to reconsider your choices. It’s probably not what you want to hear, but insurers look at sports vehicles (including bikes) as a higher risk to insure. Consequently, they charge higher premiums for these vehicles to begin with.
They charge even higher rates when you’ve been involved in a car accident with one of them. One of the best things you can do is search out a more sensible alternative – a vehicle that is inherently cheaper to insure due to its safety features, low probability of theft, and one that will keep you out of trouble, so to speak.
Wait It Out, and Switch Insurers
After enough time has passed, your rates will naturally come down. It may take a while, and sometimes you have to switch insurers to see the difference, but it will happen eventually. Switching insurers six months to a year after you’ve been ticketed for speeding might help (though there is no guarantee the insurer won’t look back at least this far).
Usually, if your claims experience isn’t too bad (i.e. you haven’t filed a lot of insurance claims), you can still save money the old fashioned way – by consolidating insurance policies. Yep, take your homeowner’s policy and combine it with your auto insurance policy. You may save money, even if you do nothing else to improve your driving record.
Gillian Kearney is an insurance consultant. She enjoys sharing her ideas and tips on various money-saving blogs. Visit the Monkey website for more ideas.
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Category: Money Basics