Strategies To Reduce State Farm Auto Insurance Premiums

There are several ways to lower your State Farm auto insurance. Firstly, you can take advantage of the various discounts offered by State Farm. For example, you can get a discount for being a safe driver, a student, or having multiple insurance policies with State Farm. Additionally, you can opt for a higher deductible, which will lower your premium but may result in higher out-of-pocket costs if you need to file a claim. You can also reduce your coverage, but this could lead to higher costs in the long run. Improving your driving record and credit score can also help lower your insurance rates. Finally, consider the type of car you drive, as expensive and sports cars tend to have higher insurance rates.

Take advantage of State Farm discounts

State Farm offers a wide variety of discounts that can help you lower your overall car insurance bill. Here are some ways you can take advantage of State Farm discounts:

Drive Safe and Save

State Farm offers an in-app feature that uses telematics to monitor your driving habits and reward you with insurance discounts for safe driving. By enrolling in the Drive Safe and Save program, you get an initial discount, and you can save up to 30% based on your driving performance. The program tracks miles driven, acceleration, braking, turns, speed, and distracted driving.

Accident-Free Discount

If you have an accident-free driving record, State Farm may reward you with a discount. Maintaining an accident-free record or actively working to become a better driver can help you save on your insurance premium.

Multi-Car Discount

If you have multiple vehicles, you can bundle policies under the same provider and receive a discount on both policies. This is a great way to save money if you have more than one car in your household.

Multi-Line or Bundling Discounts

State Farm offers a multi-policy or multi-line discount if you bundle multiple insurance products. For example, you can combine your car insurance with homeowners insurance, renters insurance, or life insurance to receive this discount.

Good Driver Discount

State Farm offers a good driver discount if you have gone three or more years without an at-fault accident or a moving violation. This discount rewards drivers who maintain a good driving record and practice safe driving habits.

Steer Clear Program

The Steer Clear Program is designed for drivers under 25 or new motorists. It tracks your driving and provides basic training through an app. Once you complete the training, a certificate will be sent to your agent, qualifying you for a discount.

Good Student Discount

If you have a teen driver on your policy who maintains good grades, you may be eligible for a Good Student Discount. This discount can save you up to 25% on your premium and may last until your teen turns 25.

Defensive Driving Course Discount

Taking an approved defensive driving course can help you qualify for a discount on your State Farm policy. This discount is available in certain states and can save you 10-15% on your premium.

Student Away at School Discount

If one of the operators of a covered vehicle is a student under the age of 25 who only uses the car while at home during school vacations and holidays, you may be eligible for the Student Away at School Discount.

Vehicle Safety Savings

State Farm offers additional savings based on the safety features of your car's make and model, including driver-assist technology. If you have a newer car with the latest safety features, you may qualify for a discount.

Passive Restraint Discount

For vehicles equipped with factory-installed airbags or other passive restraint systems, State Farm offers a discount of up to 40% on medical-related coverage.

Anti-Theft Device Discount

If your vehicle has an alarm or an approved anti-theft device, you may be eligible for a discount on your State Farm auto insurance.

Remember to check with your local State Farm agent to see which discounts are available in your state and to understand the specific requirements and eligibility criteria.

Opt for a higher deductible

Opting for a higher deductible on your State Farm auto insurance policy can be an effective way to lower your premium. A deductible is the amount you pay out of pocket when you make a claim before your insurance provider covers the remaining cost. Typically, you will pay your deductible when you file a claim with the insurance company, and they will cover any costs that exceed the deductible amount.

When choosing your car insurance deductible, you generally have a choice between a low and high deductible. A low deductible means a higher insurance rate, while a high deductible results in a lower insurance rate. For instance, if you have a $3,000 repair and a $1,000 deductible, you will be responsible for the first $1,000, and your insurance company will cover the remaining $2,000.

Most drivers choose a $500 deductible, but policies with higher deductibles tend to be cheaper overall. By increasing your deductible, you can lower your monthly insurance payments. However, it is important to keep in mind that a higher deductible means you will have higher out-of-pocket costs if you need to file a claim. Therefore, when selecting a higher deductible, it is crucial to choose an amount that you can still afford in the event of an accident or claim.

When deciding whether to opt for a higher deductible, consider factors such as your emergency fund, the value of your vehicle, your driving record, and your tolerance for risk. Evaluate your financial situation and calculate the potential savings and costs associated with a higher deductible. Additionally, consider the likelihood of filing a claim based on your driving history and the safety features of your vehicle.

State Farm offers various discounts and savings opportunities that can help offset the higher out-of-pocket costs associated with a higher deductible. For example, you can take advantage of safe driver discounts, good student discounts, and multi-policy discounts if you have other State Farm insurance products. By combining a higher deductible with these cost-saving measures, you can maintain comprehensive coverage while effectively managing your auto insurance expenses.

Reduce your coverage

Reducing your coverage is one way to lower your State Farm auto insurance premium. This means you will have to pay less each month, but it could also lead to higher costs in the long run if you need to file a claim.

Most states require a certain amount of bodily injury liability and property damage liability coverage. However, there are other coverage options that you may not need, depending on your state. These include comprehensive coverage, collision coverage, personal injury protection, and uninsured motorist coverage. Comprehensive coverage, for example, helps pay to repair or replace your vehicle if it is damaged by something other than a collision, such as theft, fire, vandalism, or hitting an animal. Collision coverage, on the other hand, helps pay to repair or replace your vehicle if it overturns or collides with another vehicle or object.

You can review your policy with your State Farm insurance agent to determine which coverages you may not need. For instance, if you have an older vehicle, you may not need comprehensive coverage, rental reimbursement, or emergency roadside service. Dropping unnecessary coverage can help lower your insurance costs.

In addition to reducing your coverage, you can also consider other ways to lower your State Farm auto insurance premium. These include taking advantage of State Farm discounts, opting for a higher deductible (as long as you can still afford it if you need to file a claim), improving your driving record and credit score, and choosing a safer vehicle.

Improve your driving record

Improving your driving record is one of the most effective ways to lower your State Farm auto insurance premium. Here are some tips to help you achieve that:

Practice Safe Driving Habits

Safe driving habits are key to maintaining a good driving record. This includes adhering to speed limits, obeying traffic rules, and driving defensively to avoid accidents. By consistently practising safe driving, you can reduce the number of moving violations on your record, which will positively impact your insurance rates.

Take Advantage of Defensive Driving Courses

Enrolling in a defensive driving course can help improve your driving skills and make you eligible for insurance discounts. State Farm offers a Steer Clear® program for new drivers or those under 25 years old, providing an opportunity to learn and become a safer driver while saving on insurance. Additionally, taking an approved defensive driving course can help remove points from your record, depending on your state's regulations.

Maintain an Accident-Free Record

Keeping your driving record free of accidents is crucial. Accidents can stay on your record for several years, affecting your insurance rates. If you've been accident-free for an extended period, don't become complacent. Continue practising good driving habits to maintain your clean record and qualify for State Farm's accident-free savings.

Avoid Moving Violations and Traffic Infractions

Moving violations, such as speeding tickets or running red lights, can significantly impact your insurance rates. These violations indicate risky driving behaviour and will lead to higher premiums. By avoiding such infractions, you can keep your driving record clean and qualify for lower State Farm insurance rates.

Regularly Review Your Driving Record

It's important to periodically review your driving record to identify any errors or inaccuracies. You can obtain a copy of your driving record from your state's Department of Motor Vehicles, usually for a small fee. By staying informed about what's on your record, you can address any issues and ensure that your insurance rates are calculated accurately.

Build and improve your credit score

Building and improving your credit score is an important step in lowering your State Farm auto insurance. Your credit history is correlated with your likelihood of filing an insurance claim, and State Farm uses your credit data to calculate your premium in states where it is legal. As a result, having good credit makes you less of an insurance risk, which will reduce your rates over time. Here are some strategies to build and improve your credit score:

• Review your credit reports: Obtain a copy of your credit report from the three major national credit bureaus (Equifax, Experian, and TransUnion). Review the reports to identify factors that may be helping or hurting your score, such as payment history, credit card balances, credit mix, age of credit accounts, and new credit inquiries. You're entitled to a free copy of your credit report from each bureau once a year through AnnualCreditReport.com.
• Get a handle on bill payments: Ensure you pay your bills on time, as this is one of the most important factors in improving your credit score. Set up a filing system, create due date alerts, and consider automating your bill payments to avoid late or missed payments.
• Aim for a low credit utilization rate: Credit utilization refers to the portion of your credit limit that you use. Keep your credit card balances low, ideally below 30%, as this is the second most important factor in credit score calculations. Pay off your credit card balances in full each month, or at least keep them below the 30% threshold. You can also request a credit limit increase to improve your credit utilization ratio.
• Limit requests for new credit: Hard inquiries into your credit history, such as applications for new credit cards, loans, or mortgages, can negatively impact your credit score for a short period of time. Avoid applying for new credit frequently, and only apply when necessary.
• Keep old accounts open: The age of your credit accounts is a factor in your credit score. Avoid closing old credit card accounts, as this could lower your available credit and increase your credit utilization ratio. If you have delinquent accounts, work on resolving them by catching up on past-due payments and sticking to a plan for making future payments on time.
• Consider consolidating your debts: If you have multiple outstanding debts, consider taking out a debt consolidation loan to pay them off. This will leave you with a single payment to manage and may help improve your credit utilization ratio.
• Use credit monitoring services: Sign up for credit monitoring services to track your credit score and receive alerts when your score changes. These services can also help prevent identity theft and fraud by notifying you of any new credit accounts or suspicious activity.

Frequently asked questions