The Top Ways to Save on Auto Insurance

December 27, 2019

You need car insurance. It’s the law. But that doesn’t mean you need to overpay for it. You have the right to shop around and even negotiate rates. But how do you save the most? We help you uncover the top ways below.

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Look at Costs Before Buying a Car

Have you thought about checking car insurance rates before you buy a car? It seems backward, but think about it. If you know a specific car has high rates, you may not buy it. Wouldn’t you rather find out ahead of time the cost of the insurance? Models that get stolen often or are involved in numerous accidents naturally have higher rates regardless of your own driving record.

Call around to different agencies and ask for ballpark estimates for the type of car(s) you are considering. This way you know what you are getting into. Of course, your premium will be adjusted according to your qualifying factors, but knowing the base rate ahead of time may help.

Take a High Deductible

Consider your deductible carefully. This is the amount you must pay before your insurance kicks in if you have a claim. The higher the deductible you accept, the less premium you’ll pay each month. Now, don’t take a deductible that you can’t afford. Think about it carefully.

How much can you comfortably afford if you have an accident or a comprehensive claim? Each coverage has its own deductible. Look at how much each deductible decreases your premium and figure out the right option that way. For example, if the difference between a $500 and $1,000 deductible is only a few dollars each month, it makes sense to keep the $500 deductible. But, if you can save a significant amount each month, it may be worth it. Look at your options.

Maximize Your Credit Score

Some insurance companies use your credit score when determining your premium. If you can increase your credit score, you decrease your risk of having high premiums. Studies show that drivers with a higher credit score are involved in fewer car accidents. Insurance companies take this data seriously. Remember, they are taking a gamble that you won’t file a claim. If you have a high credit score, they may reward you with lower premiums.

Be Honest About Your Mileage

Do you drive a lot or a little? If you only drive to and from work that is only a few miles from home, you may get lower premiums. The more miles you drive every day, the more likely you are to get involved in an accident. Discuss this option with your insurance agent. For example, if you have a third car in a two-car family, that third car probably doesn’t get driven much. Older people are a good example of this too. If they only drive to and from the local grocery store, they don’t need to pay the higher premiums for standard mileage. You may need to prove your low mileage, but that’s easy enough to do and worth it to get the discount.

Carry Less Insurance on Older Cars

If you have an older car, you may be overpaying for insurance. Look at your coverage, is it much higher than the actual value of your car? It may not be worth paying those premiums. While you have to carry liability insurance – it’s the law, you can cut down or eliminate comprehensive and collision insurance. At the very least, reducing or eliminating comprehensive insurance is worth it. If someone steals your car, you will only get the value of the car back from the insurance company. If the annual premiums exceed how much you would earn, it’s not worth it.

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In order to determine the right choice, find the value of your car. You can use Kelley Blue Book to find a good value. Next, compare it to your premium. If your premium is more than 10 times the car’s value, it’s not worth carrying that insurance.

Bundle Your Insurance

Did you know you can save money by bundling your insurance policies? Most notably, home insurance and car insurance provide the greatest discounts. When you shop around for the best insurance premiums, ask about bundling discounts. You may find that you save as much as 25% on each policy. The amount you save will vary by insurance company.

Look for Other Discounts

Insurance companies may offer other discounts on car insurance too. Some of the most common include:

  • Automatic premium payment discounts
  • Usage-based discounts (implementing a small device in your car to measure your driving habits)
  • Good driving discount
  • Good student discount
  • Customer loyalty discount
  • Starting and paying for a policy online discount
  • Anti-theft device discounts

Saving money on car insurance isn’t hard; it just requires a little legwork. Shop around and ask insurance agents about all possible discounts as well as possibilities when choosing your coverage. Don’t buy more coverage than you need, but make sure you are adequately covered.

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