Car insurance is one of those bills that seem to creep up on us out of nowhere and if we find ourselves in the situation where we can’t afford to pay the bill, what can you do? Insurance is often a legal requirement, so we do need to find a way to pay for it, but there are certain things you can do to help reduce the cost so you don’t feel it as much. Here are some tips to help if you can’t afford your car insurance bill.
Price Comparison
Gone are the days where it pays to be a loyal customer. You may find that your current provider has increase your insurance from last year for no real good reason and you can’t afford what they are asking. Thankfully, there is a plethora of price comparison sites available, input your details accurately and truthfully and see if you can match the level of cover for a smaller price.
Auto Insurance Cancellation
Most insurers will give you a 14 day ‘cooling off’ period once your insurance has restarted. If your insurance has auto renewed and you can’t afford that amount of money coming out of your bank, you have 14 days in which you can cancel. The company may charge you pro rata, but at least you will have cover for 14 days whilst you look for other options.
Deductibles
When you are comparing insurance, rates look at the deductible charges that insurers are putting on. If they are coming back at $50 to $100, why not see if you can increase them? If you have a low value car, chances are you won’t want to repair it in the event of a fault accident anyway, so you can always increase the deductibles to reduce the overall value of your premium. Please be aware though, that in the case that your car is written off, your settlement will be the value of the car less the deductibles, this will vastly reduce the amount of money you get for your vehicle if this were to happen.
Assess Your Liability Coverage
If you have a policy that has all the bells and whistles, why not remove some of these? If your car is a lower value than comprehensive cover may not be worth the extra money. In this case you can change the level of cover to give you a fairer price that you will be able to afford. Check your states legal requirements in terms of the value you need to have covered for personal injury and property and then set your insurance to these base levels.
Pay Per Mile
If you only do very few miles per year there are insurance companies out there who reward you for this. Look for companies that will do pay per mile scheme, the lower your mileage the lower your premium will be. However, due to recent fraud, they may opt to have you provide proof of your mileage at certain intervals to ensure that you aren’t going over it and trying to get a cheaper deal.
Change The Primary Driver
If you have the option to change the primary driver on your insurance then this is a worthwhile step to take. By changing the primary driver, the risk is then assessed on them. You will want to make sure that they have good driving history, so no convictions or accidents against them. Ideally, they will be a parent or another relative, preferably female as they have lower incident rates, this can adjust your premium.
Cash Deposit Scheme
These are becoming less and less common, but some places do still allow you to place a cash deposit with the states treasury department in lieu of insurance, however, you will need cash to be able to do this and it isn’t a common practice anymore.
Ask About Discounts
If you are happy with your insurance provider, ring them and ask about discounts. If you have a good driving history and haven’t had a collision or a ticket in a long time, they may well be in the position to offer you one, especially if they want to keep hold of your business. They may offer discounts if you change more of your insurance policies to theirs, which may decrease all of your overheads.
Change Your Vehicle
If you are driving and expensive car or one that insurers may perceive as being a sports car, this can increase your insurance. Whilst it isn’t enjoyable having to downgrade, it could save you a lot of money not only on your insurance policy, but on other costs such as fuel. Look for reliable vehicles that have a good safety rating as well as fuel consumption and your insurer may rate this vehicle more preferably than the one you currently have. If you own your car out right, when you sell it, factor in how much your insurance will cost for the vehicles you are looking at and then set your budget to include how much your insurance will be for the year.
Payment Extensions or Arrangements
Not all insurance companies will do this, and it does depend on how long you have been with them, but if you think that your current financial situation is temporary, you can ask for a payment extension or a deferred payment. In the case of a deferred payment, the company will take the outstanding amount, divide it by the number of months you have left to pay and then allocate it evenly across the reaming monthly payments. Again, not all insurance companies will do this, but it will buy you time, especially if you are trying to sell your car to reduce your overheads.
Final Thoughts
Insurance is one of those commodities that we don’t want to spend out on, but we have to by law. There is an array of ways to reduce your insurance bill, but in some cases you may need to make sacrifices. Start by comparing rates, and if they aren’t favourable, look at reducing your overheads elsewhere.
