A reliable vehicle is essential for real estate agents to provide first class service. Whether you own or rent your ride, almost every state requires you to have auto insurance. And if you drive for business, you may also need commercial car coverage.
While the cost of these policies can add up, there are ways for agents to stay compliant and still save money on auto insurance.
What does the car insurance cover?
Your auto insurance policy is a package of coverages that protect you against a variety of possible financial losses, including:
- The damage insurance covers damage to your vehicle. For example, collision coverage pays for repairs after you have an accident with another car. Comprehensive coverage pays non-collision claims, such as theft and damage from a natural disaster or animal. There are separate deductibles for collision and comprehensive, which are the amounts you must pay before coverage begins.
- Medical cover pays for injuries to you or your passengers following an accident. In some states it is known as personal injury protection (PIP) and is required.
- Liability coverage pays for certain expenses if you get involved in a lawsuit.
You can usually also buy:
- Uninsured or underinsured motorist coverage applies if you have an accident with a driver at fault who is uninsured or has insufficient coverage, or if you are involved in a collision.
- Glass cover, which compensates for damaged windows.
- Roadside assistance, which pays out if you get stuck in your vehicle.
- Rental car coverage, which pays a rent while your vehicle is being repaired.
7 Tips to Lower the Cost of Auto Insurance
States and car borrowers have different requirements for the types and amounts of car insurance that drivers must purchase. However, other factors that affect your rate include your vehicle’s make and model, annual mileage, driving history, credit (in most states), age, gender, and marital status. Commercial auto insurance policies can also take into account your years of driving experience and business type.
While you may not be able to change certain factors that determine your car premium (such as your age or company), here are seven ways to lower coverage costs.
1. Be a safe driver. Getting into a moving violation, DUI, or causing an accident is the fastest way to increase your car premium. So keep your driving record clean by driving the speed limit, avoiding distractions and being a defensive, alert driver.
2. Increase your deductible.
The higher your deductible, the lower your premium will be. However, the potential savings vary from state to state and insurer to insurer. Remember that increasing the deductible means you have to pay more out of pocket for claims. Therefore, it is never wise to increase them unless you maintain sufficient savings.
3. Build and maintain excellent credit.
Your credit has a major impact on how auto insurers in most states evaluate you. They use credit-based insurance scores to estimate your potential risk and likelihood of filing an auto claim, where allowed. So always pay bills and creditors on time, so that you build up and maintain an excellent credit rating.
4. Bundle your policies.
Many insurers lower premiums if you purchase more than one type of coverage, such as car and homeowners coverage, known as “bundling.”
5. Understand possible discounts.
Auto insurers offer several discounts that you may be eligible for, such as:
- Multiple vehicles for purchasing coverage on more than one vehicle
- Low mileage by driving fewer annual kilometers.
- Trained driver for taking a defensive driving course.
- Good student for drivers up to age 26 who maintain at least a “B” grade point average in high school, college, or graduate school.
- Profession for practicing certain professions, such as medicine or teaching.
- Homeowner (even if insured with another carrier).
- Loyalty to be a customer for a certain period of time.
If you have commercial auto insurance, you may be eligible for discounts based on having a commercial driver’s license (CDL) or paying your annual policy in full. However, having a safe driving record is one of the best ways to keep commercial car premiums low.
6. Sign up for usage-based insurance (UBI).
Most insurers nationwide offer programs that offer potential discounts based on your vehicle usage and driving habits. They give you a device to keep in your vehicle that syncs with a mobile app to track various metrics, such as your mileage, average speed, time of day, and braking patterns, to determine if you’re a safe driver.
7. Shop and compare policies.
Since insurers offer different rates and discounts and rate you differently, it is essential to regularly buy and compare car insurance. Agents must compare rates from at least three providers at least once a year. That’s the best way to know if you’re leaving insurance money on the table.
Laura Adams is the author and host of the Money Girl podcast.
This content should not be considered accounting or legal advice. You should consult your local tax advisor or legal professional in your country for appropriate strategies.
This column does not necessarily represent the views of the RealTrends editors and its owners.
To contact the author of this story:
Laura Adams at [email protected]
To contact the editor responsible for this story:
Tracey Velt at [email protected]