Risk, and how it pertains to how insurance companies offer cheap auto insurance
Insurance companies are out there to make money. They, like most any other company out there, operate on a risk-versus-reward basis. To them, you getting low cost auto insurance isn’t necessarily a good thing. When they look at you, they see both the possible risk (i.e. the chance you will be in an accident, requiring them to pay thousands of dollars in medical expenses, collision costs, and possibly property damage) versus the reward, which is your monthly contribution to their revenue.
Now, this sort of business model doesn’t work if 10% of the people they insure is involved in an accident every month. Indeed, even if a collision happens to an average person just 1%of the time, companies would be in serious trouble. The thing people have to realize is that the insurance industry is incredibly cutthroat, because there isn’t much in the way of difference between coverage plans and thus insurance companies. That’s why they aren’t too keen on just giving people low cost auto insurance, and an unscrupulous insurance agent might just not give you all the discounts you might be eligible for. That’s why it is so very important to use our free tool to get comparison quotes- in order to get your business, insurance companies have to give people who do a lot of comparison shopping the absolute best deals they can. Also, knowing exactly what discounts you are qualified for will give you a priceless advantage when looking at any given insurance company. Below is a fairly brief list of discounts offered by many insurance companies. If you are eligible, you can cut your bill in half.
Discounts for Everybody
First off is age based discounts. If you are retirement age, you can save a lot of money by making sure you get this one. Since, statistically, older drivers don’t drive nearly as often, nor make as many trips per day, older drivers are much less likely to be involved in an accident. This means insurance companies typically give hefty discounts to people of this age group.
If you have two cars, consider consolidating them under one policy. Doing so can earn you a hefty discount- in some cases, up to 20%. Similarly, you can also save by getting all of your insurance needs covered under one policy. That can also save you a bundle with low cost auto insurance..
Of course, there’s no substitute for a good driving record, the surest way to show you have safe driving habits. If you’ve gone 3 or more years without being involved in an accident, you probably qualify for a nice reduction in your premiums. Showing that you’ve taken a defensive driving course can also reduce your rates.
If that isn’t enough, some insurance companies offer a discount program based on your actual driving habits, rather than a vague estimation of miles driven each year. These sorts of discounts are only available to people who agree to share specific information regarding their miles driven, where the car is driven, and so on. They use communication services, like OnStar® or Sync®, to track this information to calculate a more accurate estimation of your risk, and will probably lead to a better rate for you.