Smart Ways To Save 10% On Auto Insurance

Car insurance is a costly but necessary purchase. The good news is that there are plenty of ways to save money on your premiums. Here are some tips to help you save 10% or more on your auto insurance.

Shop around for insurance providers

Shopping around for insurance providers is a great way to save money on your auto insurance. Here are some tips to help you get the best deal:

Get Multiple Quotes

Start by getting quotes from multiple insurance companies. This is easily done online using comparison tools, or by visiting company websites directly. You can also get quotes from insurance agents or independent brokers, who work with multiple insurance companies. Getting a range of quotes will give you a good idea of the prices and coverage options available. Remember to be truthful when filling out quote forms, as any inaccuracies could affect your coverage or premiums.

Understand Your Coverage Needs

Before getting quotes, it's important to understand the type and amount of coverage you need. All states require a basic level of bodily injury and property damage liability coverage. You may also want to consider additional coverage types, such as collision insurance, comprehensive insurance, uninsured motorist coverage, medical payments coverage, or personal injury protection. If you have a loan on your vehicle, your lender will likely require full-coverage insurance, which includes liability, comprehensive, and collision coverage.

Compare Rates and Discounts

When comparing insurance providers, look at more than just the premium prices. Consider the discounts offered by each company, as these can significantly reduce your overall costs. Common discounts include those for good students, drivers who've taken a defensive driving course, members of certain groups or professions, anti-theft and safety equipment, and multiple policy bundles.

Check Company Reputation

In addition to cost, consider the reputation and customer satisfaction of each insurance provider. Look for companies with high satisfaction scores when it comes to handling claims. You can also check consumer complaint studies to see how different companies rank. Remember, the lowest price isn't always the best option if the company has a poor reputation for handling claims or providing inadequate coverage.

Ask for Recommendations

Don't be afraid to ask friends and family for recommendations based on their experiences with different insurance providers. Doing your own research is important, but getting first-hand accounts from people you trust can provide valuable insight into the quality of service and coverage offered by different companies.

Be Wary of Hidden Fees

When comparing insurance providers, be mindful of potential hidden fees or charges. For example, if you choose to use an insurance broker, they may charge broker fees and other transaction fees. These additional costs can add up, so be sure to inquire about any extra charges before making a decision.

By following these tips and shopping around for insurance providers, you can save money on your auto insurance and find a policy that best suits your needs.

Increase your deductible

One way to save on auto insurance is to increase your deductible. A deductible is the amount of money you're required to pay out of pocket each time you file a claim against your car insurance policy. For example, if your vehicle incurs $1500 of damage, and your deductible is $500, you'll pay that amount, and your insurer will cover the remaining $1000.

While it may seem counterintuitive to pay more for claims, increasing your deductible generally results in lower premium costs. If you don't drive often and believe you're less likely to get into accidents or sustain vehicle damage, a higher deductible could be a good option for you.

However, it's important to ensure you have enough money in savings to cover the higher deductible in the event of a claim. While you may enjoy lower premiums, you'll need to pay more upfront if you get into an accident.

How much you can save by raising your deductible varies by company. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30%. Going to a $1000 deductible can save you 40% or more.

Remove unnecessary coverage

Removing unnecessary coverage is a great way to save money on your auto insurance. Here are some tips to help you reduce your coverage and lower your premiums:

Review your policy details

It's important to carefully review your auto insurance policy to identify any coverage that you don't need or use. For example, if you have a brand-new car, you might not need roadside assistance coverage as it is typically included in the manufacturer's warranty for the first three to five years. Similarly, if your car is worth less than a few thousand dollars or is more than ten years old, consider dropping collision and comprehensive coverage.

Assess your car's value

The value of your car plays a crucial role in determining the necessary coverage. If your car is worth less than ten times your insurance premium, having collision or comprehensive coverage may not be cost-effective. Use websites like Kelley Blue Book, National Association of Auto Dealers (NADA), or TrueCar to check the value of your car. Compare this value to your insurance costs and the replacement value you would receive from your insurance company in the event of a total loss.

Consider your risk tolerance and emergency fund

While removing unnecessary coverage can save you money, it's important to strike a balance between risk tolerance and affordability. Assess your financial situation and emergency fund. If you can afford to pay for accident repairs yourself and have sufficient savings to cover any unexpected damages, you may consider reducing your coverage. However, if you don't have an adequate emergency fund, it's advisable to maintain a higher level of coverage to protect yourself financially in the event of an accident.

Choose the right deductible

Opting for a higher deductible can help lower your premium costs. By choosing a higher deductible, you agree to pay more out of pocket if you need to make a claim. Ensure that you have enough money set aside to cover this higher deductible in case of an accident.

Compare insurance costs

Compare insurance costs and coverage options from different companies. Some insurers may offer more affordable rates for similar coverage. Additionally, consider bundling your auto insurance with other types of insurance, such as homeowners', renters', or life insurance. Many insurers provide discounts for multiple policies, which can result in significant savings.

Remember, while removing unnecessary coverage can help you save money on your auto insurance, it's essential to strike a balance between cost savings and adequate protection. Assess your financial situation, the value of your car, and your comfort level with risk to make informed decisions about your coverage.

Compare insurance costs before buying a car

When buying a car, it's important to look at the total cost of ownership, including gas, maintenance, repairs, and insurance. While it's not always easy to predict maintenance and repair costs, you can estimate your insurance premium before buying a car.

• Narrow down your vehicle selection: With numerous makes and models available, it's impractical to get an insurance estimate for every option. Instead, select your top two or three choices based on your budget, desired features, and lifestyle. Keep in mind that certain characteristics of the vehicle may increase or decrease insurance costs.
• Estimate the coverage you need: At a minimum, you must purchase enough coverage to meet your state's insurance requirements. However, this may not be sufficient to protect you financially in the event of a severe accident. Consider purchasing coverage that's at least equal to your assets to safeguard yourself from potential lawsuits. Additionally, consider optional coverages like collision and comprehensive, especially if you have a newer vehicle or an auto loan or lease.
• Get quotes from multiple insurers: Insurance companies use different formulas to calculate rates, so pricing can vary significantly. Contact several insurers, captive agents, or brokers, or gather pricing information online or over the phone. When getting quotes, provide accurate information about yourself and the vehicle, including the driver's license numbers, vehicle make and model, vehicle identification number (VIN), and expected annual mileage.
• Choose the right deductible: Your deductible is the amount you must pay before the insurance company covers a claim. Policies with higher deductibles typically have lower premiums. When selecting your deductible, choose an amount that you can comfortably afford to pay if you need to file a claim.
• Compare policies with the same limits and deductibles: When evaluating insurance policies, ensure you're comparing apples to apples. Make sure the policies have the same coverage limits and deductibles to get an accurate idea of the cost.
• Consider safety and anti-theft features: Vehicles with safety features like anti-lock brakes and airbags may qualify for lower insurance rates. Additionally, cars with anti-theft features such as alarm systems, GPS tracking, or ignition shut-off switches may also be eligible for discounts.
• Research discounts: Different insurers offer various discounts, so be sure to ask about them. For example, good student discounts are often available for students who maintain a certain grade point average. You may also find discounts for multi-policy holders (combining auto insurance with homeowners, renters, or life insurance) or multi-car policies (insuring multiple vehicles with the same company).
• Factor in personal characteristics: Your age, gender, marital status, driving record, credit history, and location can all impact your insurance rates. Teen drivers, for instance, typically have higher insurance quotes than other age groups.

By following these steps, you can make an informed decision about the cost of insuring different vehicles and choose the option that best fits your budget and needs.

Take advantage of discounts

Taking advantage of discounts is a great way to save on auto insurance. Here are some of the most common types of discounts offered by insurance companies:

Bundling Discounts

Many insurance companies offer discounts if you purchase multiple types of insurance policies from them, such as bundling auto insurance with homeowners, renters, life, or other types of insurance. This can often result in significant savings, with potential discounts ranging from 5% to 18% on your insurance bill. Additionally, you can also combine all your vehicles under the same policy, which can lead to further savings of up to 25% with a multi-vehicle policy discount.

Safety Discounts

Insurers often reward safe drivers with discounts. This can include maintaining a good driving record by staying accident-free, completing a defensive driving or driver safety course, or reducing your annual mileage. Some companies also offer telematics programs, which track your driving habits and provide discounts based on your driving ability and risk level.

Student Discounts

Insurance companies often offer discounts to students who maintain good grades. Additionally, if a student is heading to college without a car, they may be eligible for lower insurance rates.

Payment Discounts

Changing how you pay your bill can also lead to savings. Many insurance companies offer discounts for paying online, choosing paperless billing, or signing up for automatic payments. Paying for an annual policy in full instead of making monthly payments can also result in a discount.

Affiliation Discounts

Some insurance companies, such as Geico, offer discounted rates to members of certain professional and alumni organizations. This can include fraternities, sororities, honor societies, academic societies, and various trade and professional groups. Your occupation may also qualify you for a discount. For example, teachers, nurses, emergency responders, military members, and federal employees may be eligible for discounts from certain insurance providers.

Frequently asked questions