We’ve heard the insurance tagline over and over: “Switch and save money today.” Every insurance company claims to have the best deal. But, how can you get a good deal while maintaining the appropriate amount of coverage? We’ve got you covered—literally, and with no extra cost to you. Check out these ten ways to help lower your car insurance.
1. Get Quotes Annually
Insurance rates are increasing every year, so your insurance premiums will naturally increase over time. However, a huge spike in your insurance bill might mean it’s time to switch providers. Every year or two, use a car insurance quote finder to compare your current insurance rate to competitors. You can also sign up for Jerry.Ai, a tool that automatically checks for the lowest insurance rates before your policy renewal. Requesting quotes annually will ensure that your rates remain low and competitive.
2. Bundle Your Insurance Plans
Insurance companies often offer discounts when you bundle home, auto, or life insurance. Plus, you have the added convenience of paying all your insurance on one bill. If you’re satisfied with your insurance rates, you can stay with the same company to build up discount opportunities. Some insurance companies will give discounts to their long-term customers, also known as a customer loyalty discount. Bundling and customer loyalty can help you lower your overall insurance costs.
3. Get Rid of Insurance You Don’t Need
Older vehicles require less insurance depending on their overall value. For example, you may not need collision and comprehensive coverage on a vehicle if its value is less than your deductible combined with your insurance premium. If you have a car that’s only worth $1,000–$3,000, you might decide to get rid of some of your insurance and purchase a replacement vehicle out of pocket in the case of an accident. If you don’t drop unneeded insurance, you can end up spending more on your premiums than what the total car is worth.
4. Increase Your Deductible
A deductible is the amount of money you pay out of pocket as a result of an accident. An increased deductible means lower premium rates. This is a great option for individuals who can keep enough cash savings to cover their deductible in the event of any emergency. Ask your insurance agent about raising your deductible to see how your premiums will fluctuate.
5. Drive Safely
This one might seem kind of obvious, but driving safely is the best way to keep your insurance rates low. Insurance providers record your driving history, including any accident reports or traffic tickets. These instances accrue points that eventually lead to increased insurance rates. Even if you switch insurance providers, companies will be able to access your driving history. Try your best to avoid speeding, running red lights, and driving recklessly. Be smart, and drive smart.
If you do get a ticket, take a defensive driving class to get the points taken off your record. A defensive driving class is an online or in-person course created by individual states to teach drivers how to anticipate dangerous situations and make educated driving decisions. In some states, taking this class can reduce your insurance by 10 percent.
The defensive driving course may seem expensive for a single ticket, but it will end up saving you money on your insurance premiums. You can usually take driving school once a year. If you keep a clean driving record for three to five years, you could save on your insurance rates.
6. Improve Your Credit Score
Studies show that drivers with a higher credit score are more responsible behind the wheel. Drivers with higher credit scores cost the insurance company less than individuals with a low credit score. A credit score is just another way for insurance companies to measure risk—the very thing insurance companies seek to avoid. Improving your credit score can also help you qualify for auto and home loans. Study your credit report and find ways to improve your overall credit score.
Are you looking for a way to monitor your credit needs? Check out ExtraCredit by Credit.com. It has five killer features, each specifically designed to help you out—no matter what shape your credit is in.
7. Pick the Right Vehicle
Insurance rates fluctuate based on the make and model of a car. This is something to consider when purchasing a new or used car. A car such as a Toyota or Chevy will be significantly cheaper to insure than a Porsche. That’s because it’s less risk for insurance companies. Remember, getting a cheaper insurance premium is dependent on your ability to minimize risk for the insurance company. Picking a car brand with an affordable initial price and reasonable upkeep costs can help you save money on insurance and your vehicle in general. You can also save on car insurance by selecting a smaller car with installed safety features.
8. Choose a Group Insurance Plan
People under the same household can create a group policy to save money. The plan will be more expensive as you add individuals to your group policy, but cheaper than if everyone was on their own insurance plan. Members of the insurance plan either need to be related or have joint ownership of the car. Each of the drivers will be insured for all the cars your family owns. Younger drivers will be more expensive to insure because of their added risk. Look for additional discounts to minimize your total group rate.
9. Ask Your Insurance Provider About Other Discounts
Car insurance companies often have additional discounts for specific groups of people. For example, if you are a member of the military, you can get a discount at some insurance companies. You can also lower the insurance premium for your teenage driver through a good student discount. Some other car insurance discounts include the following:
- Government employees and retirees discount
- Multiple vehicle discount
- Homeowners discount (separate from the bundling discount)
- Paperless billing discount
- Hybrid or green vehicle discount
- Driver education discount for people under 21
- Automatic payments or paid-in-full discount
Ask your insurance provider about additional discounts to see if you qualify.
10. Find Out About Pay-as-You-Go or Usage-Based Insurance
If you don’t use your car often, you may be able to save on your insurance. Some companies offer a discount for driving under 10,000 miles in a single year. Other companies offer a pay as you go plan that allows you to pay a base rate and then pay per mile. These discounts could save you money if you do not have a long work commute or if you rarely use your car. This may also be a good incentive to use public transportation when possible.
We all want to save money on car insurance, but that’s not the only factor in becoming a smart insurance customer. Before diving into savings, first determine your insurance needs and goals. Do your research to find out the difference between liability and full coverage insurance. Once you have the right coverage, you can start chipping away at your rates by following these ten tips to lower your car insurance.
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