If you live in a multi-vehicle household, say with three cars, did know there are ways to take advantage of your circumstances that will help you save on your car insurance? It’s true. If you know what you’re looking for and you know the right questions to ask your insurance representative, you can save a good amount of money. Keep reading for some helpful tips and tricks.
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Since auto insurance rates are built on a risk-to-reward ratio for the insurance company, the greater you can make their potential reward, the less it will cost you overall. So all of the tips we offer here are based on that principle. By the way, the opposite is also true; if you reduce the potential reward, or increase the risk for your insurance company, your rates will go up.
Can I save if I combine multiple cars on one policy?
Combining multiple cars on one policy is the place to start in our three vehicle scenario. But you need to know that while you’re technically insuring cars, in practical terms, you’re really insuring drivers. So, if each of your cars has a different driver you can combine them under the same policy under certain conditions.
Obviously, a married couple can both be included on the same policy as well as their minor children. Also, children can remain on a parent’s policy at least until age 21. In some states that can be as high as 26 as long as the child is in school. Combining all three drivers on one policy will save you money over having three separate policies.
A teen driver who does not qualify to be on your policy can have a separate policy on the same “account” as long as he or she still lives in your house. While that won’t save as much money as the previous scenario, it still will reduce the cost of your child’s policy. Different providers will vary in how they implement this practice, so it’s important that you ask for details when comparing auto insurance companies.
What if I buy a new car?
Buying a new car will often trigger higher insurance premiums because of the increased value of the policy. In order to get the best rate with that new car, it’s important to assess all three drivers and their relation to all three vehicles.
Since your new car is most likely going to be the most valuable, you want to assign the driver with the least risk to that vehicle. To make this easy to understand we’ll use our three vehicle scenario and assume a father, mother, and a 19-year-old son.
All things being equal, if all three drivers have records that are accident and violation free, the mother would present the lowest risk and carry the lowest price. When you purchase a new car she should become the principal driver of that car to keep the rates as low as possible. Dad would get the car second in value, and the son would get the car least in value.
By assigning the lowest risk to the most expensive car you keep the rates down. By the same token, buying your son a brand-new car and giving it to him as the principal driver is guaranteed to raise your rates.
Just be careful when you’re assigning vehicles to be honest. If you claim that mom is the principal driver of the new car, and yet you allow your son to drive it to and from school during the week, and to and from work as needed, then you’re probably not abiding by the agreement. If your son should have a car accident, and the insurance company investigation reveals that he was truly the principal driver of the vehicle, your rates will almost definitely go up.
Can I combine other policies?
Insurance companies love to bundle insurance policies because their potential reward skyrockets in comparison to their potential risk. It’s like anything else; if they can sell in bulk they can earn more money. So, if you have two parents and a child with properly assigned vehicles, and they’re all on the same policy, that policy can be bundled with homeowners insurance, life insurance, umbrella coverage, etc.
By bundling all your policies with the same insurance company, your carrier is banking on the fact that it’s unlikely that you’ll make a claim on more than one of those policies in a given period of time. Yet they’re receiving premiums on all of them. This raises their reward, reduces your risk, and keeps your rates low. In addition to the previously mentioned policies, you can also bundle special policies for RVs, boats, motorcycles, and the like.
Whether you live in a multi-vehicle home or not, you can still search online for great auto insurance rates by entering your zip code now!