Imagine you are driving to work one frosty morning and you hit a patch of black ice, your car skids across lanes into the path of a large commercial truck. The truck manages to avoid hitting you but veers off into a ditch tipped over on its side. Inside the truck is $1 million of glassware, all of it smashed to bits!
Through no real fault of your own, you are now up for $1 million of damages.
This is just one of the thousands of examples where car insurance is an absolute necessity. In that particular instance, you would be so thankful you took out the policy that the cost of the insurance will be long forgotten.
But if you are a safe driver who hasn’t had any accidents for years, you might regularly question the value of your car insurance. If you haven’t compared your current car insurance policy with competitors, there’s a good chance that you are paying more than you have to.
Car insurance premiums vary by hundreds of dollars depending on several factors. You should review your coverage every year to make sure your insurance is providing value for money.
Here are some practical steps you can do to reduce the costs and get the cheapest car insurance in Minnesota.
Shop around for your car insurance
Always get at least three quotes, from different car insurers. Check with local friends and relatives for their experiences. It’s no use getting a cheap premium than suffering delays and cheap repairs at claim time.
Make sure the company you choose is reputable, and that you’re comfortable with the service you get from the insurance professionals you speak to. Check online for consumer complaints.
Compare insurance costs before you buy a car
Auto insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of car theft or personal injuries, or for cars that are known to be safe.
When comparing new or used vehicles to purchase, also research the insurance costs. You can by checking safety rankings for specific models with the Insurance Institute for Highway Safety’s (IIHS) online Top Safety Pick rating tool.
Raise your deductible
The higher deductible, the lower your car insurance costs. Just make sure you have enough money available to pay that deductible in the event you have a claim.
Reduce optional insurance on your older car
As a rule of thumb, if your car is worth less than 10 times the annual insurance premium, then comprehensive coverage may not be cost-effective. Instead, you can just have third-party car insurance which will pay for the damage to the other parties if you are at fault.
Check the value of your car for free on websites such as Kelley Blue Book, National Association of Auto Dealers (NADA), and TrueCar.
Bundle your insurance
You will usually get a discount if you take your car insurance along with home or home contents insurance with the same company.
Take advantage of low mileage discounts
If you travel less than the average person in the car, you may be able to get a low mileage discount.
Seek out other discounts
Ask each insurer about all possible discounts. They might reduce the premium for items like having a car alarm, various safety features, and under 25-year-old driver who only has access to the car outside college times, all drivers have taken a defensive driving course, etc.
Keep in mind to balance the lowest cost with the level of coverage that you want and the reliability at claim time. You might save $50/year on premiums but if the insurer causes delays at claim time resulting in you hiring care for two weeks. That insurer is more expensive.