How You Can Lower Your Risk Level to Lower Your Car Insurance Premium

How You Can Lower Your Risk Level to Lower Your Car Insurance Premium from North Carolina Lifestyle Blogger Adventures of Frugal Mom

Your insurance rate is set by a calculation that determines what level of risk you pose to your insurance provider, so anything you do to lower that risk will go a long way to earning you a discount. This works differently to a product like motor trade insurance, where an individual would be required to insure themselves on multiple vehicles – there are a lot more variables. There are some risk factors that are out of your control however – like your age or where you live. But, luckily, there are many that you can change to decrease your rate. Read on to discover three ways you can lower your risk level, and in turn, lower your car insurance rate.  

Invest in Safety and Protection

Anything that you can do to protect your car from accidents or theft will give your insurer a reason to lower your premium. First and foremost, when you’re shopping for a car, you’ll want to look for a make and model with a high safety rating and updated safety features. If you already have a vehicle, you can still take steps to increase its safety. For example, did you know that winter tires stop 1.8 meters (six feet) shorter than all-season tires in icy conditions? Since that added distance can help prevent collisions when the temperature drops, many insurers offer a discount to drivers who install them each winter.

In addition, protecting your car from theft will also lower your risk level. You can do this by purchasing a security system that will deter people from stealing your car, or a vehicle-recovery system that will increase the odds that your car will be returned to you if it is stolen. In both scenarios, your insurer could reward you with a lower premium.

Prove that You’re a Safe Driver

You know that you’re a safer than average driver, but your insurance company has to rely on statistics from the general population to determine your rate. But, what if you could prove that they can trust you behind the wheel? You actually can – if you sign up for a Usage-Based Insurance (UBI) plan. Drivers who sign up for this type of plan plug a telematics device into their car to track their driving habits, such as acceleration, speed, distance driven and braking. That information is then sent to the insurance company, who can use it to better assess an individual driver’s risk. In return, drivers get a small discount on their insurance upfront, and the possibility of a larger discount at renewal if their data shows they’re engaging in the safe behavior. For the most part, drivers are making the case that they deserve a lower premium: one insurer reported that 70 percent of drivers with a Usage-Based insurance plan earn some kind of discount.

Take on More of the Risk Yourself

It makes sense that if you take on more risk, your insurance provider will take on less – but how can you do that? For starters, you can raise your deductible, the money that you agree to pay if you make an insurance claim. A higher deductible will lower your premium payment, but only consider this option if you have enough money in an emergency fund to cover the cost of the extra expense if you were to make a claim. You can also agree to drop certain parts of your insurance coverage that aren’t required by law – like collision coverage. Again, this only makes sense in certain scenarios, like if you know that the amount of money you’d get from your insurer to replace your car in the case of a collision is less than you’re paying for collision coverage and your deductible. Again, you need to be prepared for that risk with enough money in an emergency fund to replace your vehicle in that unfortunate scenario.

Believe or not, your insurer wants to give you the best rate possible on your car insurance – you just have to show them that you’re worth the risk.

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