15 Ways to Lower Your Car Insurance Premiums
Lower your car insurance premiums now and Pay no more than is necessary, car insurance is required to safeguard you financially while driving. Whether you have basic liability insurance or comprehensive vehicle coverage, it’s important to shop around to get the best cost. Are you looking for a way to save money on your vehicle insurance? Here are 15 ways to cut your vehicle insurance prices.
- If you have other insurance policies with the same company, you may be eligible for a discount bulk rate for insuring multiple vehicles and drivers at the same time.
- Lower car insurance rates may also be available if you have other insurance policies with the same company.
- Keeping a clean driving record is essential for obtaining reduced vehicle insurance premiums.
What Is the Cost of Car Insurance?
Every driver’s car insurance rates vary based on the state they reside in, the insurance company they choose, and the kind of coverage they have. However, knowing what the average driver spends for auto insurance might help you save money.
According to the most recent data from the National Association of Insurance Commissioners (NAIC), the average consumer paid $1,190 on vehicle insurance in 2018. According to NAIC statistics, automobile insurance rates increased by 30% between 2014 and 2018, despite the fact that the number of covered cars only increased by 7%.
According to AAA, the average cost of auto insurance for new cars in 2020 will be $1,202 per year2. The figures are close enough together to imply that when budgeting for a new automobile, you should factor in around $100 per month for auto insurance.
While certain factors affecting auto insurance prices, such as driving history, are under your control, others, such as state restrictions and accident rates, may have an impact.
How to Save Money on Car Insurance
You may save money on auto insurance by using a variety of tactics. You may use any or all of these strategies once you know how much auto insurance will cost you.
- Benefit from Multi-Car Discounts
If you ask an auto insurance provider for a quotation for a single car, you may get a higher rate per vehicle than if you asked about insuring many drivers or vehicles with that company. Because they desire your business, insurance firms often give what amounts to a bulk rate. They may be ready to offer you a discount if you promise to bring in more of it under certain conditions.
Check with your insurance agent to see if you are eligible. Multiple drivers must, in general, live in the same house and be related by blood or marriage. Two unrelated persons may also be eligible for a discount; however, they must normally own the car together.
You might expect to spend extra for insurance if one of your drivers is a teen. If your kid has a B average or is in the top 20% of his or her class, you may be able to receive a substantial student discount on the coverage, which usually lasts until your child reaches the age of 25. These reductions may vary from 1% to 39%, so be careful to show your insurance agent evidence that your adolescent is an excellent student.
In addition, some companies may give you a discount on auto insurance if you have other policies with them, such as homeowners insurance. Check to determine whether such savings are available and appropriate. For example, Allstate gives a 10% vehicle insurance discount and a 25% house insurance discount when you bundle them together.
- Keep Your Eyes on the Road
To put it another way, drive safely. This should go without saying, but in this day and age of increased in-car distractions, it’s worth repeating. The more alert you are, the fewer accidents or moving offenses you will encounter—events that will boost your insurance costs. Depending on your driving record, Travelers offers safe driver discounts ranging from 10% to 23%.
For those who aren’t aware, a motorist is usually given points for moving offenses, and having more points may result in higher insurance prices (all else being equal).
- Enroll in a Defensive Driving Program.
When you finish an authorized defensive driving course, your insurance company may offer you a discount. By completing a defensive driving, accident prevention, or other course, drivers may be able to lower the amount of points on their license.
Before you sign up for a class, be sure to ask your agent or insurance provider about this discount. After all, it’s essential that the time and money spent on the course result in a significant insurance savings. It’s also critical that the driver enroll in an approved course. Every state has its own regulations for authorized defensive driving classes, which you can look up on GEICO’s website by state.
- Look for lower car insurance rates by shopping around.
If your coverage is due to expire and the yearly premium has increased significantly, shop about and get quotes from several firms. Also, every year or two, it’s probably a good idea to get quotations from different firms to see if there’s a better deal out there.
Remember that cheap doesn’t necessarily equal excellent, and choosing the cheapest firm isn’t always the best option. This is because the creditworthiness of the insurer should also be examined. After all, what use is insurance coverage if the corporation can’t afford to pay an insurance claim?
Consider using a site that analyzes the financial soundness of insurance firms to do a background check on a certain insurer. Your insurance company’s financial soundness is vital, but you need also make sure you understand what your policy covers. The insurance business ratings on Insure.com are based on data compiled by Standard & Poor.
In general, the less miles you drive per year, the cheaper your insurance cost will be, so always inquire about a company’s mileage limits.
- Take use of public transportation
When you sign up for insurance, the provider will usually begin by asking you a series of questions. The amount of miles you drive the insured vehicle every year may be one of the questions it asks.
If you travel three hours to work every day, your insurance rates will almost certainly be higher than if you just drive one mile a day. If at all feasible, use public transportation to reduce your mileage, but bear in mind that you’ll need to reduce your mileage enough to qualify for a discount.
So that your efforts aren’t wasted, inquire about your insurance company’s various mileage requirements.
Also, inquire with your provider about the number of miles you are presently driving, as most may supply you with a better insurance price.
- Reduce the size of your vehicle
While purchasing a large SUV may seem appealing, insuring a 5,000-pound, top-of-the-line vehicle might be more costly than insuring a tiny (but safe) low-cost commuter car. If you acquire a hybrid or alternative fuel car, some insurers may give you a discount. Farmers, for instance, gives a 5% discount.
You may feel good about helping the environment while still saving money on insurance. Before making a purchase, find out the specific insurance costs for the various automobiles you’re considering.
- Make Your Deductibles Higher
When purchasing automobile insurance, you often have the option of picking a deductible, which is the amount of money you must pay before insurance will cover the cost of repairs in the case of an accident, theft, or other sorts of vehicle damage. Deductibles normally vary from $250 to $1,000, depending on the coverage. The catch is that the smaller the deductible, the higher the yearly premium in general.
Conversely, the cheaper the premium, the greater the deductible. Inquire your insurance agent about how raising your deductible can effect your rate. It might lower your yearly premium by several percentage points, putting money back in your pocket, or it could be nothing. If you’re hesitant to submit minor claims because you don’t want your premium to go up, increasing your deductible can be a good idea.
- Boost Your Credit Score
The driving record of a motorist is certainly a significant element in deciding the cost of vehicle insurance. After all, it’s understandable that a motorist with a history of accidents may end up costing the insurance company a lot of money. However, many people are astonished to learn that insurance firms may take credit scores into account when deciding insurance prices.
Why is your credit score taken into account? “Many insurers employ credit-based insurance ratings,” says Michael Barry, senior vice president and director of public relations at the Insurance Information Institute. It’s a difficult subject in certain statehouses [but] insurers will assert that their research demonstrates that being responsible in your personal life reduces the likelihood of filing claims.”
Regardless of whether that’s accurate, be aware that your credit score is used to calculate insurance rates, and do all you can to maintain it as high as possible.
Your credit card provider or bank may provide free access to your credit score. AnnualCreditReport.com allows you to examine your credit reports for free.
- When calculating car insurance rates, keep your location in mind.
It’s improbable that you’ll relocate to a distant state only to save money on vehicle insurance. When making a move, however, the possibility of a change in your auto insurance cost should be included in your budget.
- Check Your Insurance Coverage
It might be risky to forego some forms of coverage. After all, no one can say whether or not an accident will happen. If you’re driving a severely old car that’s on its final legs, though, dropping collision or comprehensive coverage may make sense (depending on the cost, your driving record, and other circumstances).
The reason for this is that if the vehicle is involved in an accident, the insurance company will almost certainly declare the vehicle totaled. If the automobile is only worth $1,000 and collision coverage costs $500 per year, it may not be worthwhile to purchase it.
- Get Discounts on Anti-Theft Device Installation
Individuals who install anti-theft devices may be able to cut their yearly rates. If your automobile has an anti-theft system, GEICO, for example, provides a “possible discount” of 25%.
Your insurance provider should be able to inform you which devices, if installed, may help you save money on your rates. Car alarms and LoJacks are two sorts of gadgets you should look into.
If lowering your insurance premium is your major motive for installing an anti-theft device, examine if the cost of adding the device will result in a big enough reduction to justify the effort and price.
- Consult with your agent
It’s worth noting that, in addition to the ones mentioned in this article, there may be more ways to save money. Indeed, it’s common sense to inquire whether the firm provides any unique discounts, such as for military members or workers of a certain company. You never know what kind of discounts are available for your specific situation.
- Change to a pay-as-you-go insurance plan.
A usage-based insurance program (also known as black box insurance) may be available to you if you’re a safe, low-mileage driver, such as Allstate’s Drivewise,9 Progressive’s Snapshot,10 or State Farm’s Drive Safe & Save.
11 In return for prospective savings depending on how much you drive, when you drive, and how well you drive, you sign up for these programs, which allow your insurance to monitor your driving using a telemetric device placed in your vehicle. You may be able to save money with this sort of service if you drive less than 10,000 miles each year.
- Look for Additional Savings
Insurers provide a wide range of discounts. Look for deals like these:
- Agreements to receive e-bills and documents • Offers to pay the complete yearly or six-month subscription at once
- Discounted memberships in specified organizations or groups
Don’t let a big list of prospective discounts persuade you. Multiple insurers’ discount and normal costs are compared.
- Get Rid of Insurance You May Not Need
You may not need all of the policy’s features, such as roadside assistance and automobile rental coverage. Go through your insurance policy line by line and ask if anything you don’t need may be removed.
Check with your credit card provider to see whether they provide roadside assistance to cardholders, since this may enable you to exclude this coverage from your vehicle insurance policy.
Auto insurance premiums are anticipated to continue to grow in the future. There are, however, a number of things you may do to lessen the sting. These 15 pointers should help you start on the right track. Remember to shop around for the best auto insurance companies to discover one that meets your demands and matches your budget.