If you own a passenger vehicle, you know that paying for auto insurance is an unavoidable expense. While auto insurance is required to protect both you and the drivers you share the road with, it's important to recognize that there are some simple ways that you can reduce your insurance premiums.
Here are three costly mistakes that many drivers make when it comes to auto insurance, and some tips that will help you avoid making these mistakes yourself.
1. Opting for monthly payments.
While it might seem more convenient to pay your auto insurance premiums on a monthly basis, doing so could be costing you money. Many insurance companies charge a fee for monthly payments, and these same companies offer discounts for paying your premiums in full.
Since it is in the insurance company's best interest to receive the full amount of your premiums (that way they don't have to worry about missed monthly payments, or the costs associated with collecting late payments) they reward you with a discount. While the amount varies from one insurer to the next, you could save up to 20% on the cost of your policy by opting to pay your premiums in full.
2. Failing to update your existing policy.
Many drivers continue to renew their auto insurance policy year after year without considering an update. Over time, your insurance policy could become outdated. Failing to update your insurance policy when your life circumstances change could be costing you money.
Major life events (like purchasing a new home or getting a new job) can influence the cost of your insurance premiums. If you bundle your auto insurance with your new homeowner's insurance, you could receive a discount. Getting a new job closer to home could reduce your commute, which can also lower your premiums. Updating your policy on a regular basis will ensure that you don't overpay for your auto insurance.
3. Buying too much insurance.
While being under-insured is a definite no-no, having too much insurance could be costly. If you don't put a lot of miles on your car each year, you may be able to take advantage of pay-per-mile insurance policies that are designed to prevent low-mileage drivers from buying too much auto insurance.
While the saving varies across insurance companies, the average savings for low-mileage drivers who switch to a pay-per-mile policy is between 10% and 12%.
When it comes to auto insurance, saving money is important. Be sure that you aren't making costly auto insurance mistakes in the future. Visit an auto insurance agency like Edwards Insurance Agency today.