Finances FYI Presented by JPMorgan Chase
Car insurance isn’t just smart, it’s necessary. It’s illegal to drive without insurance, and you won’t be issued a license plate in many states unless you can provide proof of insurance. But it can be expensive, and shopping for it can be confusing. Finding the right policy at the right rate can take time, but considering this will be a monthly expense for as long as you drive a car, it’s worthwhile to find the best possible plan for you.
First, find out your state’s minimum insurance requirements. General types of car insurance include bodily injury liability, property damage liability, personal injury protection, and uninsured/underinsured motorist protection. Many states only include liability insurance, so check in your state and see what’s necessary.
Some things just can’t be helped when shopping for insurance. Younger people can expect to pay higher rates because insurance companies work from datasets showing that younger people get in more accidents. That’s why your insurance rate will often go down after age 25. Similarly, men are usually charged higher rates than women. You can try to negotiate these things, and some companies have tools or policies that allow them to evaluate drivers on a more personalized level to get them a quote that is more in line with their driving history, but unfortunately, some realities can’t be avoided.
Compare and Compare Some More
Comparison shopping is tedious, time-consuming work that involves a lot of talking to different agents and getting quotes. But this process helps you see any red flags in policies and get the best quote for your needs. You’ll gain an education and learn which questions to ask while saving money.
If you already have insurance for your home, rental, or other property, see if the company you use for that policy offers bundling for car insurance. Many companies offer discounts to customers who have more than one policy with them. Others offer discounts for longtime customers, so if you have a standing relationship with an insurance company, see if you can build on it to your benefit. Some companies also offer multi-generational discounts for people whose parents were policyholders as well.
Car insurance companies charge higher fees to people who they think will cost them more money — such as people who might get in accidents more frequently than others. To keep this from happening to you, drive safely and smartly. Even things like speeding tickets can count against you, so make sure that you’re being cautious. It’s safe and money-smart!
Improve Your Credit
Similarly, insurance companies give drivers with good credit better rates. Having good credit shows that you will pay your premiums on time, and, fair or not, insurance companies view people with lower credit as higher-risk to insure. That’s because they think people with lower credit will file more claims. But your driving record is still more important, so if you have good credit and a poor driving history, you won’t see as many benefits.
Get a Smaller, More Sensible Car
Smaller cars generally get cheaper rates. Sports-utility vehicles are known to have a higher rollover rate, and luxury vehicles are expensive to fix if they get in an accident. Some companies also offer discounts for hybrid or fuel-efficient vehicles.
Car insurance is necessary, but it doesn’t have to break the bank. With a little bit of time and education, you can get a rate that fits better into your budget and still gets you and your car the protection you need.
Finances FYI is presented byJPMorgan Chase. JPMorgan Chase is making a $30 billion commitment over the next five years to address some of the largest drivers of the racial wealth divide.