Are you a risky driver? Do you consider yourself a safe driver? I have to admit that I’ve been in a few accidents. Two to be exact and they were both my fault, but they were minor fender benders and there are years between them. I once heard that every driver will have an accident at least once every 10 years. Kinda scary huh? Now imagine if you are the insurance provider and you have to pay out cash every time there is an accident. Not to mention the paperwork and potential legal fees that come along with each accident.
How Insurance Works
Car Insurance is all about risk and statistics. The car insurance provider charges a premium each month or each six months. That premium pays for the ‘assurance’ that in the case of an accident, the car insurance company will pay for damages and any other costs that may arise. The insurance policy covers what will and will not be covered and how much the driver has to pay out of pocket, also known as the deductible. If you have an accident and it is your fault, you have to pay your deductible before the car insurance company will pay anything. A higher deductible means lower payments each month because it puts more of the monetary risk on you, the driver. A lower deductible puts more financial risk on the provider so they will charge you a higher premium each month to take on that risk.
Reducing Risk for Cheaper Insurance
In order to reduce your risk of having an accident, you have to be a defensive driver. What that really means is that you have to drive like an old lady who barely gets out. Leave 3 car lengths between your car and the car in front of you so that you can always come to a coasting stop even if they slam on their brakes. Slow down while approaching a light in case it changes and you have to come to an abrupt stop. A hard break is when your car slows more than 7 MPH in one second. I’ve learned that if I come to a coasting stop, I can avoid hard breaks. Drive during times of low traffic and avoid high risk times. If you work a 9 to 5, driving outside of high traffic hours will be pretty hard but think about how you can avoid the bulk of traffic. Maybe it means leaving the house an hour early and spending that extra hour at work or in the gym close to your job. Also, if you wait until 6pm to leave work, you are avoiding so many potential accidents. Everyone knows that an anxious driver is very dangerous. You should also avoid driving during the times when there could be drunk drivers on the road. This is between midnight and 4 am. If you like to go out at night, consider taking a taxi instead or even taking a party bus. Be creative, but avoid driving at those times if you can. It’s been said that drowsy drivers are as bad and could be worse than drunk drivers. During this time drivers could be dozing at the wheel and that is very risky.
Other Ways to Reduce Insurance Costs
There are a few other ways to reduce your costs on your insurance policy
- Don’t pay for what you don’t need. Review your policy to make sure you are not paying for coverage that you will not use.
- Combine policies. Many insurance providers will offer a bundle package if you insure more than one vehicle or asset with them.
- Maintain a good credit score. Insurance companies use credit scores as a gauge of the responsibility of a driver. A higher credit score means a more responsible person to them.
- Avoid tickets. Don’t get pulled over! A ticket on your record means higher insurance costs
- Shop around. Don’t just go with a company because you saw an ad on tv. Ask friends and family what they like about their insurance company. Get opinions on customer service, response time and hidden fees. You are paying a premium for more than security. Get a car insurance quote today.
How did you find your current insurance company?