Get Cheaper Auto Insurance: Tips And Tricks

There are a number of ways to get cheaper car insurance. Firstly, it's important to shop around and compare rates from multiple companies, as no single insurer is the low-price leader for everyone. It's also worth checking out smaller, local insurers, as well as the big names, as they may have lower rates. Asking about discounts is another good way to save money on car insurance. For example, you may be able to get a discount for bundling car insurance with another policy, such as homeowners insurance, or for having a clean driving record. If you have a poor driving record, it's worth noting that Progressive is a great option for high-risk drivers. Another way to save money is to drop comprehensive and collision coverage for an older car, as it may not make sense to shell out for these types of coverage if your car has a low market value. Finally, increasing your deductible will lower your premium, but be prepared to pay more out of pocket if you file a claim.

Shop around for the best rate

Shopping around for the best rate is one of the most effective ways to get cheaper auto insurance. Comparing rates from multiple companies is the best way to find affordable auto insurance. This is because each company uses a different method to set its rates, and these methods change over time. As a result, comparing rates from two car insurance companies may reveal vastly different results for the same driver.

When comparing rates, it is important to have certain pieces of information ready, such as the personal information of anyone who will be on the policy, including their date of birth, driver's license number, and address. You will also need the driving history and insurance history of all drivers on the policy, as well as the vehicle information of all vehicles on the policy, including the VIN.

In addition to comparing rates, it is also important to compare the coverage offered by each company. Liability coverage, for example, is required in most states, but the minimum coverage limits vary by state. Other types of coverage, such as collision and comprehensive coverage, may also be required, depending on whether you have a car loan or lease.

When comparing rates, it is also worth considering the customer service and claims satisfaction of each company. This can be done by looking at reviews and ratings from independent sources. It is also important to consider the financial strength of the company to ensure that they will be able to pay out claims.

Finally, when shopping around for auto insurance, it is important to be wary of companies that offer extremely low rates. These companies may have poor customer service or may not be financially stable. It is also important to read the fine print to ensure that there are no hidden fees or exclusions in the policy.

Ask about discounts

Discounts are a great way to save on your auto insurance. While your company should sign you up for the discounts you qualify for, it never hurts to ask about them and make sure. Companies don't always offer the same discounts, but there are some common types you might get.

Good driver discount

If you haven't filed an insurance claim and have a good driving record, you can probably get a good driver discount. Companies see good drivers as less of a risk and will reward you with lower premiums. Most insurers will offer this discount if you're a "good driver", which generally means not having any accidents or traffic violations in the past three to five years.

Multi-car discount

If you have more than one car on your policy, you'll likely get a discount. Insuring multiple cars with one company is seen as a lower risk, and you'll be rewarded with lower premiums.

Multi-policy discount

You can also get a discount for having other policies with the same company, like a home or renters policy. This is often referred to as "bundling" and can lead to significant savings on your insurance premiums.

Low-mileage discount

If you don't drive much, your chances of staying accident-free are better. Let your company know if you work from home or only drive for pleasure, as this can qualify you for a low-mileage discount.

Good student discount

If you have high school or college students who get good grades, let your company know. Companies often reward good students with a discount, typically requiring a B average or above.

Defensive driver discount

You may receive a defensive driver discount if you complete a defensive driving course, which teaches tactics to become a safer driver. In some cases, only drivers aged 55 or older qualify for this discount.

Alumni or membership discounts

Some insurers grant special car insurance discounts for alumni from certain universities, Greek life alumni, and members of professional organizations.

Military and federal employees discount

If you're a federal employee, in the armed forces, a veteran, or related to someone in the military, you may qualify for a discount.

Alternative energy discount

An environmentally friendly vehicle like an electric car can save you money on gas and insurance. Some carriers will give you a discount regardless of whether you own or lease.

Anti-theft devices discount

Cars with more anti-theft devices are less likely to be stolen, which is good for you and your company. Multiple companies offer car insurance discounts for having protective devices like alarms or steering wheel locks.

Safety equipment discount

In many cases, carriers will offer small insurance discounts for vehicles with anti-lock brakes, dual airbags, or other safety features.

Drop comprehensive and collision coverage for older cars

Dropping comprehensive and collision coverage for older cars can be a good way to save money on your insurance. Comprehensive coverage pays to repair or replace your car if it's stolen or damaged by something other than a collision, such as fire, flood, animal collision, or vandalism. Collision coverage, on the other hand, pays to repair or replace your car if you collide with another object, such as a car, guardrail, or tree. While these coverages are valuable and often required if you have a car loan or lease, they may not be worth the cost when your car gets older and loses value.

Value of Your Car

The value of your car is an important factor in deciding whether to keep or drop comprehensive and collision coverage. As your car ages, its value decreases, and at some point, the cost of these coverages may exceed the value of the car. For example, if your older car is worth $5,000 and you have a $2,000 deductible, the maximum payout you could receive is $3,000, which may not justify the cost of the coverages.

Cost of Insurance vs. Value of Car

Compare the cost of your comprehensive and collision coverage to the value of your car. If the cost of insurance is a significant percentage of the car's value, it may not be a good investment to continue these coverages. For instance, if the insurance cost is more than 40% of the car's value, it may be wise to consider dropping the coverages.

Age and Condition of Your Car

The age and condition of your car can impact the cost of repairs and the likelihood of needing them. As cars get older, they may be more prone to breakdowns and repairs, which can be costly. If your older car is in good condition and doesn't require frequent repairs, you may be able to get by without comprehensive and collision coverage.

Your Financial Situation

Consider your financial situation and whether you could afford to repair or replace your car if it's damaged or stolen. If you have savings or other financial resources to cover these costs, you may not need comprehensive and collision coverage. However, if an unexpected repair or total loss would be a financial burden, keeping these coverages may be a good idea.

Alternative Coverage Options

Even if you decide to drop comprehensive and collision coverage, you may still want to consider alternative coverages to protect yourself. For example, you could add uninsured or underinsured motorist property damage coverage to protect your vehicle if it's damaged by another driver who has insufficient insurance. Additionally, liability coverage, which is usually required by law, will protect you if you cause damage to another vehicle or property.

Shopping Around

Before making any decisions, it's a good idea to shop around and compare rates from multiple insurance companies. You may find that some insurers offer more competitive rates for comprehensive and collision coverage on older vehicles. Getting quotes from several insurers will help you make an informed decision.

In conclusion, dropping comprehensive and collision coverage on an older car can be a strategic way to save money on your insurance costs. Carefully consider your car's value, the cost of insurance relative to that value, the age and condition of your car, your financial situation, and alternative coverage options. Remember to weigh your options and make a decision that best suits your needs and circumstances.

Increase your deductible

One way to get cheaper auto insurance is to increase your deductible. A deductible is the amount you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your insurance costs. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30%. Going to a $1,000 deductible can save you 40% or more.

However, it is important to ensure that you have enough money set aside to pay the deductible in the event of a claim. Additionally, if you have a higher deductible, you will pay more out of pocket for repairs as part of a covered claim. It's also worth noting that in some cases, the amount of damages may be less than your deductible, meaning you would need to cover the cost of repairs yourself.

Before choosing a higher deductible, consider your financial situation and whether you can afford to pay a higher sum in the event of a claim.

Consider usage-based insurance

Usage-based insurance (UBI) is a type of auto insurance that calculates your premium based on your driving behaviour. UBI is a good option for those who don't drive a lot of miles and are safe drivers. If you're a good driver, UBI can lower your insurance premium by 10% to 30%.

UBI programs generally measure:

• Speeding
• Acceleration
• Harsh braking
• Mileage
• The time of day you drive

There are two types of UBI:

• Pay-how-you-drive programs: These monitor driving behaviours such as mileage, the time of day you drive, and changes in speed.
• Pay-as-you-drive, pay-as-you-go, or pay-per-mile plans: These only track mileage.

• Allstate Drivewise: Tracks your speed, breaking habits, and the time of day you drive to determine your cash back.
• Esurance DriveSense: Measures a range of driving behaviours, such as miles driven at high speeds, hard braking, and major speed changes.
• Liberty Mutual RightTrack: Tracks nighttime driving, braking, and acceleration.
• Metromile: Uses a base rate and the number of miles you've driven to determine how much you pay for coverage each month.
• Nationwide SmartRide: Measures miles driven, hard braking, acceleration, idle time, and night-time driving.
• Progressive Snapshot: Tracks your mileage, the time of day you drive, and how you drive.
• State Farm Drive Safe & Save: Measures mileage and behaviours like acceleration, braking, cornering, speed, and distracted driving.
• Travelers IntelliDrive: Captures the time of day you drive, along with your speed, acceleration, braking, and distractions.

While UBI can help lower your insurance premium, it's important to note that it may not be available in all states. Additionally, some insurers may increase your premium if you don't score well during the review phase of a UBI program. Therefore, it's important to read the fine print and understand the program's rules before signing up.

Frequently asked questions