As car insurance rates creep up over time, learning how to get a lower price on your car insurance becomes more and more important. While auto insurance rates are not negotiable, there are ways you can reduce your premiums while still getting the most expansive coverage. If you’re wondering how to get a lower price on your car insurance, you’ve come to the right place.
What are some ways you can lower your auto insurance premium costs?
1. Know how much coverage you need.
Almost all U.S. states require you to carry a certain amount of auto liability insurance, including bodily injury and property damage liability. Take a look at your state’s department of transportation website to see the minimum required limits for you to carry. These numbers will usually be expressed as three numbers like 30/50/20. This means you have $30,000 in bodily injury liability per person, $50,000 of bodily injury liability per accident, and $20,000 in property damage liability.
The minimum requirements of your state are usually not enough liability insurance. However, it’s a good place to start when you’re looking at your policy to see how much liability insurance you need.
2. Know how much coverage you have.
Take a look at your current policy. You’ll want to dig deep to see exactly what you’re paying for. Check out the different coverage types you have, the policy limits, as well as any additional benefits you’re paying for.
We recommend everyone have the following coverage types:
How much you need of each coverage is dependent upon your individual needs, car, and risk tolerance. You’ll want to weigh the cost of the premium with the potential costs of what you’d have to pay if you didn’t have enough insurance to cover the total cost.
As you’re taking a look at your policy, see if there are any additional “benefits” you’re paying for that you don’t need as well. For example, you might be paying for roadside assistance through your auto insurance. But if you have AAA, you’re already covered for roadside assistance. Some credit cards even offer roadside mechanics and towing. If you already have roadside covered another way that you prefer, you may be able to remove it from your auto insurance to save money on your premiums.
3. Inquire about safety discounts.
One of our favorite ways to save on auto insurance is through safety discounts. Most car insurers will offer a good driver or safe driver discount if you can prove that you’re less of a risk on the road. We love this discount because you’re staying safe on the road and you’re getting a discount for doing so!
Some factors that count as “safety” discounts:
- No accidents or moving violations in the past three years
- Safety features on car, like anti-lock brakes, airbags, four-wheel drive, and anti-theft devices
- Taking a defensive driving course
- Storing your car in a secure garage
4. Maintain a good credit score.
Most insurers will pull your credit report and use it as a primary factor in your auto insurance price. Research shows that people who effectively manage their credit have fewer insurance claims, so insurers are willing to offer lower premiums to those with good credit standing.
If you’ve had positive changes in your credit score recently, you may want to reach out to your insurance agent to see if you can get a lower premium on your auto insurance.
5. See about good student discounts for teen drivers.
If you have a teen driver, your rates are probably much higher than they were before adding your teen to your insurance. That’s because teen and new drivers are considered the highest risk on the road, so insurance companies usually charge a significantly higher premium (It’s referred to as the “under 25” expense.) To offset these costs, ask your insurance agent about a good student discount.
If your teen has a 3.0 GPA or above a B average report card, they may qualify for a good student discount. Similar to a credit score, this shows the responsibility of the driver—and greater responsibility means lower risk.
6. Don’t negotiate. Have a conversation.
Your insurer is there to help you. Getting a lower auto insurance premium doesn’t have to be a win/lose situation. When you chat with an agent, your goal should be to show them that you’re as low risk on the road as possible. If you can prove that you’re a high value customer, they’re going to give you the greatest discounts. That’s why safe driving, good student, and good credit score discounts are so steep. They demonstrate a level of responsibility that make you the ideal client for an insurance company to take on, even at a lower cost.
7. Bundle multiple cars or policies.
Bundling is one of the most effective ways to get large discounts on your policies. If you have multiple cars, insuring them with the same company can offer a sizeable discount.
Also, bundling your auto, home, and other policies can save you up to one-third on your insurance premiums. If you find a company you like that offers good coverage options for all your needs, purchasing multiple policies with them can provide great discount rates.
8. Ask about payment discounts.
Some insurance companies offer discounts based on the way you pay. For example:
- If you pay your insurance for the year upfront, rather than monthly
- If you enroll in e-billing and automatic payments
- If you’re a long-time customer renewing your plan year after year
A lot of people are surprised to find that sometimes it’s as simple as enrolling in automatic payment to get you up to 10% off your auto insurance premiums!
9. Drive less.
A lot of insurance carriers offer low mileage discounts. If you bike, take the bus, work from home, or have another primary method of transportation (that you can prove), you can chat with your insurance agent about a low mileage discount. Since less time on the road means you’re less of a risk, a lot of insurers are willing to lower premiums to those not using their car as frequently.
This also rings true for college students away from home. If you have a driver listed on your car who will only be using the car on breaks and summer vacation, you’ll probably be able to get a discount while keeping them as a driver on the car (so they’re covered when they’re home from school and driving your car).
10. See if you can get a group or employer discount.
Some employers or associations will partner with insurance companies to offer their employees/members a discount on insurance. Check to see if you are part of any groups that have insurance discounts, like:
- Alumni groups
- Chambers of commerce
- Volunteer associations
- Specific groups, like a classic car club or boating association
You usually don’t have to buy the insurance through that group. You can purchase it with InsuraMatch, and we’ll find you the best quotes at insurance carriers where you can receive the best discounts with your groups.
11. Adjust your deductibles.
Raising your deductible can help lower your premium costs. In some cases, raising your deductible could lower your premiums by 20-40%. However, it’s not always proportional; it’s not as if raising your deductible by $500 will save you $500 on your annual premium. You’ll want to compare the numbers, do some math, and weigh your risk tolerance to figure out which deductible is actually most economical for you. Learn how much you save by raising your deductible here.
Keep in mind that you have to pay that deductible out of pocket before making a claim. Don’t choose a deductible that’s too high that you wouldn’t be able to pay it today.
12. Reduce coverage wisely (on certain cars).
Comprehensive and collision insurance policies cover damages to your own car. Collision handles damages caused by a collision, whether or not it’s your fault, and comprehensive covers “everything else” like theft, vandalism, storms, floods, hail, explosion, falling objects, etc. If your car is old and on its way out, it may not be worth it to hold high limits of comprehensive/collision insurance.
The general rule of thumb is if your car is worth less than 10x your monthly premium for collision/comprehensive, high limits may not be worth it. However, this isn’t a hard and fast rule. Basically, if your car’s total value is lower than what you would pay over the year or two in premiums, you can probably reduce your comprehensive and collision insurance. Lowering your coverage means paying less on premiums.
Note: We almost never recommend minimizing liability insurance. If you cause an accident, you could be responsible for hundreds of thousands of dollars—regardless of the age of your car. You should have enough liability insurance to cover your assets.
13. Be smart with insurance claims.
The more you use your auto insurance, the more it costs. Submitting more claims tells your insurer that you’re a higher risk, so they’ll raise your premiums to match that risk. So be smart about when you submit a claim. Don’t do it for every ding, and definitely don’t submit a claim for any damages to your car that are less than your deductible.
Your insurance is there to help protect you. Don’t be afraid to use it, but know that over-using could end up raising your premiums.
14. Avoid lapses in coverage.
Even one day without auto coverage can cause a dent in your insurance premiums moving forward. Make sure you handle policy renewals or changes quickly to avoid accidental lapses in coverage.
15. Shop around.
Compare quotes every six months or at least yearly to ensure you’re getting the best coverage at the best rates. Your insurance needs can change quickly, so make sure your policy is keeping up. Shopping around is the best way to ensure you’re always getting your coverage at the fairest price.
16. Work with an InsuraMatch advisor.
An unfortunate truth that shopping directly with an insurance company only gives you one option in terms of coverage and price. At InsuraMatch, we work with over 30 leading regional and national insurance companies to offer you choice and discounts.
Compare quotes and save on your auto insurance by calling one of our expert insurance advisors today at (844) 819-2221!
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