Smart Ways To Save On Auto Insurance

Vehicle insurance can be expensive, but there are many ways to save money on your premiums. Firstly, shop around and compare quotes from multiple providers. This is because prices differ from company to company, and you might be able to get a better deal elsewhere. You can also ask your current provider about any discounts you might be eligible for, such as multi-vehicle, multi-policy, military, homeowner, good student, customer loyalty, and safe driver discounts. Another way to save money is to increase your deductible, which is the amount you pay out of pocket before insurance covers the rest. A higher deductible typically means lower premiums. You can also reduce your coverage if you feel you're paying for more than you need, especially if you have an older car. Finally, consider improving your credit score, as this can lower your insurance rates in most states.

Shop around for insurance providers

Shopping around for insurance providers is a great way to save money on vehicle insurance. Prices differ from company to company, so it is worth comparing prices from multiple providers. It is recommended to get at least three quotes from different insurance companies and different types of insurance companies.

There are several ways to get car insurance quotes:

• Contact an insurance company's agent. This is a simple way to get a quote, but it is a slow way to compare companies.
• Use an insurance broker or independent insurance agent. They work with multiple insurance companies and can help you comparison shop. However, they may try to sell you more coverage than you need.
• Get a quote from a company's website. This allows you to get an instant price and shop without talking to an agent. However, online quote forms may not cover all situations.
• Use an online comparison tool. This is a fast and easy way to get prices from multiple companies at once. However, it may not offer extra help in deciding the level of coverage you want.

When shopping around for insurance providers, it is important to gather the necessary information, decide on the type and amount of coverage needed, and compare quotes. It is also a good idea to shop around every time your policy is up for renewal to ensure you are getting the best deal.

Compare insurance costs before buying a car

Comparing insurance costs before buying a car can help you save money. Here's how to do it:

Narrow down your vehicle selection

There are many makes and models to choose from, so it's not practical to get an insurance estimate for every vehicle. Instead, select your top two or three choices based on your budget, available features, and lifestyle. Keep in mind that certain characteristics of the car may increase or decrease the cost of insurance. For example, the price of the vehicle, repair costs, the age of the car, the make and model, body type, safety features, and anti-theft features can all impact the insurance rate.

Estimate the coverage you need

At a minimum, you need to 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 shield yourself from potential lawsuits.

Additionally, some coverages like collision and comprehensive insurance, which cover damage to your vehicle, are not required by any state but may be worth considering, especially if you have a newer vehicle or if your lender or leasing company requires it.

Get quotes from multiple insurers

Insurance companies use proprietary formulas to calculate rates, so pricing can vary significantly between insurers. It's essential to shop around and get quotes from multiple companies. You can gather this information online, over the phone, or in-person from an insurer, captive agent, or broker.

Choose the right deductible

The deductible is the amount you must pay before the insurance company covers the rest. Policies with higher deductibles typically cost less than those with lower deductibles. When selecting your deductible, choose an amount that you can comfortably afford to pay if you need to file a claim.

Compare insurance rates accurately

When evaluating coverage, ensure you're comparing policies with the same limits and deductibles to make an accurate comparison. Provide detailed information about the drivers and vehicles to get precise quotes. This includes driver's license numbers, vehicle details like the year, make, model, and Vehicle Identification Number (VIN), and the expected annual mileage.

Find ways to save on your car insurance

To find the most affordable policy, shop around and compare quotes between insurers, but stick with reputable companies that have strong financial ratings and positive customer reviews. Take advantage of car insurance discounts, which vary between insurers, so be sure to ask about them. Some common discounts include good student discounts, multi-policy discounts, multi-car discounts, and safe driver discounts.

Additionally, improving your credit score can positively impact your insurance rates, as insurers often use credit-based insurance scores to help price premiums.

Raise your deductible

Raising your deductible is a great way to save money on your vehicle insurance. A deductible is the amount of money your auto insurance company will deduct from a claim check. Typically, the higher the car insurance deductible you are willing to accept, the cheaper the premiums will be, as you are assuming more financial responsibility in the event of a claim. Conversely, if you have a lower deductible, your insurer assumes more financial responsibility and will therefore typically charge a higher rate for coverage.

For example, if you have a $500 deductible and your repair bill is $2,000, the insurer will pay out $1,500 once you've paid the $500. By choosing a higher deductible on your car insurance, you can significantly lower your premium costs.

However, it's important to ensure you have enough money set aside to pay the higher deductible in the event of a claim. Additionally, do the math and compare potential savings because raising a deductible will not make sense in every case. For instance, if you increase your deductible from $500 to $1,000 and save $180 in annual premium costs, it will take almost three years to recoup the $500 increase in your deductible.

Drivers who increase their deductibles can save between 7% to 28% a year on average. The biggest savings are usually available to drivers who make a substantial change to their deductible, such as jumping from $250 to $2,000. The actual amount you save depends on your current deductible, your new deductible, and your auto insurance company.

Remove unnecessary coverage

One way to save on vehicle insurance is to remove unnecessary coverage. This means dropping coverage that you don't need, such as collision and comprehensive insurance on an older car that is not worth much. If your car is worth less than your deductible plus the amount you pay for annual coverage, then it's probably not worth keeping this coverage. Collision insurance covers the cost of repairing damage to your car if it crashes into another vehicle or object, or if it flips over. Comprehensive insurance covers you if your car is stolen or damaged by storms, vandalism or by hitting an animal.

However, before removing this coverage, it's a good idea to research your car's value and average repair costs in your area to see if you could afford repairs on your own. You should also consider whether you could afford to replace the car if it was written off. If you remove collision and comprehensive coverage, remember to set aside the money you would have spent on insurance. Put it in a fund for car repairs or a new car.

Another way to save on insurance is to remove duplicate or unnecessary coverage. For example, you might have included rental car reimbursement in your policy when you only had one car, but now you have two. Or you might have another service that offers roadside assistance, so you won't need it in your car insurance policy.

You can also save money by switching from full coverage to liability-only insurance. However, before making this change, research your car's value and average repair costs to see if you could afford repairs. Keep in mind that liability insurance does not include a deductible, so you will need to pay the full cost of any repairs yourself.

Finally, if you have an older car, it might not be worth keeping optional insurance. As a rule of thumb, if your car is worth less than ten times the insurance premium, having collision and/or comprehensive coverage may not be cost-effective. Check your car's value on websites such as Kelley Blue Book, the National Association of Auto Dealers (NADA) or TrueCar.

Take advantage of discounts

Taking advantage of discounts is a great way to save on vehicle insurance. Here are some common discounts to look out for:

Multi-Policy Discounts

Many insurance companies will offer a discount if you bundle multiple policies with them. For example, you can often save money by bundling your car insurance with your home insurance or by insuring multiple vehicles with the same company.

Loyalty Discounts

If you've been insured by the same company for several years, you may be eligible for a loyalty discount. Even if you're not, some companies will reward you for maintaining consistent coverage over time.

Low Mileage Discounts

Some companies offer discounts to motorists who drive less than the average number of miles per year. This may also apply to those who carpool to work.

Safety Feature Discounts

If your car has safety features such as anti-lock brakes and airbags, you may be eligible for a discount. Anti-theft devices and blind-spot warning systems may also help reduce your premium.

Profession-Based Discounts

Some insurance companies offer discounts based on your profession. This commonly applies to teachers, nurses, and members of the military.

Good Student Discounts

Younger drivers can be more expensive to insure, but many companies offer good student discounts. For example, insurers will typically offer lower rates to students who maintain at least a B average in school.

Payment Discounts

You may be able to get a discount by paying your premium upfront for the year rather than in monthly instalments. You may also be able to save by setting up automatic payments or agreeing to go paperless.

Group Insurance Discounts

Some companies offer reduced rates to drivers who get insurance through a group plan. Check with any groups or associations you're affiliated with to see if they offer any discounts.

Remember to always ask your insurance company about what discounts you may be eligible for, and be sure to shop around to find the best deal.

Frequently asked questions