A reliable vehicle is essential for real estate agents to provide top-notch service. Whether you own or lease your ride, almost every state requires you to have some auto insurance. Plus, when you drive for business, you may also need commercial auto coverage.
What does auto insurance cover?
- Property coverage reimburses you for damage to your vehicle. For instance, collision coverage pays repairs after you get into 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 coverage pays for injuries to you or your passengers after an accident. In some states, it’s known as personal injury protection (PIP) and is required.
- Liability coverage pays for certain expenses if you get involved in a lawsuit.
You can typically also purchase:
- Uninsured or underinsured motorist coverage applies if you’re in a crash with an at-fault driver who isn’t insured or doesn’t have enough coverage or you get involved in a hit-and-run.
- Glass coverage, which pays for damaged windows.
- Roadside assistance, which pays if you get stranded in your vehicle.
- Rental car coverage, which pays for a rental while your vehicle gets repaired.
7 Tips to cut the cost of auto insurance
States and auto lenders have different requirements for the types and amounts of auto insurance drivers must purchase. However, other factors that affect your rate include your vehicle make and model, annual mileage, driving history, credit (in most states), age, gender, and marital status. Commercial auto insurance may also consider your years of driving experience and business type.
While you may not be able to change certain factors that determine your auto premium (such as your age or business), here are seven ways to reduce the cost of coverage.
1. Be a safe driver. Getting a moving violation,
DUI, or causing an accident is the fastest way to increase your auto premium. So keep your driving record clean by driving the speed limit, avoiding distractions, and being a defensive, alert driver.
2. Increase your deductibles.The higher your auto deductibles, the lower your premium will be. However, the potential savings vary from state to state and insurer to insurer. Remember that raising deductibles means paying more out-of-pocket for claims. Therefore, increasing them is never wise unless you maintain enough savings.
3. Build and maintain excellent credit.Your credit significantly affects how auto insurers in most states evaluate you. They use credit-based insurance scores to estimate your potential risk and likelihood of making an auto claim where allowed. So, always pay bills and creditors on time, so you build and maintain excellent credit.
4. Bundle your policies.
Many insurers reduce premiums if you purchase more than one type of coverage, such as auto and homeowners, known as “bundling.”
5. Understand potential discounts.
Auto insurers offer various discounts you may qualify for, such as:
- Multi-vehicle for purchasing coverage on more than one vehicle
- Low mileage for driving fewer annual miles.
- Educated driver for completing a defensive driving course.
- Good student for drivers up to age 26 who maintain at least a “B” average in high school, college, or graduate school.
- Occupation for working in certain professions, such as medicine or education.
- Homeowner (even if it gets insured with a different carrier).
- Loyalty for being a customer for a certain period.
If you have commercial auto insurance, you may qualify 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 auto premiums low.
6. Enroll in usage-based insurance (UBI).Most nationwide insurers 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 evaluate you differently, it’s essential to shop and
compare car insurance quotes regularly. Agents should compare rates from at least three providers at least once a year. That’s the best way to know if you’re leaving any insurance money on the table.
This content should not be considered accounting or legal advice. You should consult your local tax or legal professional in your state for appropriate strategies.
This column does not necessarily reflect the opinion of RealTrends’ editorial department and its owners.
