Tips For When You Cannot Afford Car Insurance Renewal

Posted on: 16 June 2022

You should never cancel your auto insurance, even if you don't have money if you still intend to drive. For one, the law requires all drivers to carry insurance. Secondly, you need insurance to shield you from financial losses in case of an accident or theft. If you cannot afford to renew your current policy, the best alternative is to lower your rates.

Below are helpful measures to lower your rates.

Increase Your Deductible

Car insurance deductible lowers the payout you may receive from the insurance company if you file a claim. Ideally, your emergency funds should cover your deductible at the very least since an accident can occur at any time. However, raising your deductible (even without adequate emergency savings) is better than driving without insurance coverage.

Ask for Discounts

Auto insurance companies rarely advertise all the discounts they offer. In most cases, you can only maximize your discounts if you specifically ask for them. Research possible discounts and talk to your insurance company. Alternatively, consult an insurance agent to help you identify and get all the possible discounts.

Lower Your Coverage

The amount and variation of coverage in your policy determine your premiums. For example, a policy that includes liability, collision, and comprehensive coverage is costlier than a policy with liability coverage alone. Add-ons, such as zero depreciation, roadside assistance, and consumables cover, also increase your overall insurance cost.

Trim your coverage and lower your rates. You can even decide to carry the barest coverage, liability coverage, and pay the lowest rates possible.

Switch Carriers

Auto insurance companies will give you different rates even if you furnish them with the same details. The discrepancies appear because insurance companies emphasize different aspects of your risk.

For example, high annual mileage inflates your insurance rates. However, the limits vary by company; for example, one company may consider 10,000 miles high while another may have their limit at 12,000 miles. You may snag lower rates if you seek quotes from multiple companies.

Consider Pay-As-You-drive Insurance

Lastly, consider pay-as-you-drive insurance (usage-based coverage) if you can buy such a policy in your state. Pay-as-you-drive insurance allows your insurance company to monitor your driving habits, including:

  • Your driving speed
  • Your braking and accelerating habits
  • Your driving hours

The insurance company then uses the data to calculate your insurance rates. You may snag affordable rates if you are a good driver and don't drive a lot.

For more information on car insurance, contact a professional near you.