How to Chop Down Your Monthly Car Insurance Payments

December 30, 2016 · Posted in General Articles on Car Insurance 

Monthly car insurance payments are one of the larger items in many budgets – and often, they just keep getting bigger and bigger! You may have been eagerly anticipating your insurance rates to drop as your car reaches a certain age, only to have them keep right on climbing! It is frustrating, but fortunately there are some ways to lower your insurance costs, especially if you pay on a monthly basis.

The first step is to check on the internet to find quotes for insurance rates; you can compare rates online and doing this can in many cases save you up to 20 percent compared to your current rates. It is easy to get these quotes online, since you can enter the necessary information just once and receive quotes from a number of different insurers at once.

If you are one of those consumers whose car insurance is paid in the form of an annual payment, then you only have one chance per year to look at what other insurers are offering and to change your policy. However, if you make monthly payments then you have far more opportunities available to you. You can drop your policy within the policy year in most cases as long as you let your insurer know ahead of time. When you do this you should ask your agent if there is any sort of fee incurred by doing this; many insurers add something called a “short rate” which is a higher premium paid when you cancel before the policy year is up.

When you give an insurance company advanced notice that you’re dropping their policy, make certain you coordinate the date you drop it with the beginning date on your new policy. Check to see how many days notice is required, if any. Include your name, address and policy number in the letter.

Many learn that they can actually get more coverage while paying less for their insurance when they comparison shop for car insurance. You may be tempted to save by going for a lower deductible, but you are generally better off with higher liability limits instead. Since this determines how much protection you have in the event that you are sued by someone who has been injured in an accident for which you are liable, high liability limits are a wise investment.

You can set up your monthly car insurance payments to be taken directly out of your checking account. With monthly payments, this can actually save you a little bit of money, since many insurers charge you a fee for mailing premium notices to you.

If you already have automatic payments set up, you can still save on your monthly car insurance payments by switching to a different car insurance company. Just contact your insurer and ask them for a cancellation form, if one is needed. This form or a letter informing them of your cancellation should be sent to your insurer along with a note stating that you do not want any payments deducted automatically after your cancellation date. Make a copy of this letter and keep it for your records in case of a dispute or mis-communication.

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