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You are financially protected when you drive with car insurance. You should always ensure you get the best possible deal on your insurance policy, regardless of whether you only have liability or full auto coverage. Here are 15 ways to save on your car insurance.
What is the cost of car insurance?
Car insurance costs vary for each driver, depending on where they live, the insurance company they choose, and their coverage. According to the latest National Association of Insurance Commissioners figures, a typical driver will spend $1,176 in 2020 on car insurance. NAIC data shows that between 2019 and 2020, premiums have decreased by 2.4%. 1
According to AAA, the cost of auto insurance is expected to be about $100 per month more in 2020 than in 2010.
Multi-car discounts are available
If you insure multiple vehicles with the same insurance company, you may pay a higher rate per vehicle. Many insurance companies offer a “bulk rate” to get your business.
Multiple drivers must live in the same house and be related by blood or marriage. You can also get a discount if you are two unrelated people, but both must own the car.
If one of your drivers has a high school diploma, you can expect to pay a higher premium. However, if the student is in the top 20 percent of his class, or earns a B- or better in their classes, then there may be a discount for good students. These discounts usually last until the child turns 25. These discounts can range anywhere from 1% up to 39%. Be sure to show your agent proof that your child is a good scholar.
Some companies offer discounts on auto insurance if you have other policies, like homeowners insurance. Allstate offers discounts of up to 25% when you bundle homeowners and auto insurance.
Be alert on the road
Be a careful driver. You’ll save money on your insurance if you avoid accidents and moving violations. Travelers offer discounts for safe drivers that vary depending on the driving record.
For moving violations, a driver is usually assessed points. More points can result in higher insurance rates.
Get a defensive driving class
Some insurance companies offer discounts to drivers that complete a defensive driving course. By taking a defensive or accident prevention driving course, drivers can reduce the points on their licenses.
Ask your insurance agent or company if they can offer you a discount. You should also make sure that the course you choose is accredited. Each state has different rules for accreditation. GEICO’s website allows you to view the statutes by state.
Compare car insurance quotes to find the best deal
If your annual premium has increased significantly and you are about to renew your policy, compare quotes with other companies. You should always get quotes from different companies, even if you don’t need to.
But cheap doesn’t always mean good. It is also essential to consider the creditworthiness of the insurer. What’s the point of a policy if the insurer isn’t able to pay for its claims? Check out a website that rates the financial health of insurance companies.
It is essential to understand your contract, not only because it covers your financial strength but also what it covers. Insure.com’s website bases its ratings of insurance companies on data gathered by Standard and Poor’s.
Insurance rates are generally lower if you drive less than a certain number of miles annually. Ask about the company’s thresholds for mileage.
Mass transit
You will be asked to complete a questionnaire when you apply for auto insurance. You can expect to answer questions about the miles the insured vehicle drives yearly.
Consider using public transportation to reduce your mileage. You’ll need to lower your mileage by a significant amount before you can receive a discount. You can avoid wasting time by asking your insurance provider about their mileage thresholds.
You can increase your deductions
When you choose car insurance, you can select the amount of deductible that you wish to pay. The deductible is the amount you must pay before the insurance company pays the rest in case of an accident. Depending on the policy, deductibles can range from $250 to $1000. The higher the premium, the lower the deductible. In the opposite direction, the higher your deductible is, the lower your premium.
Your agent can tell you how increasing your deductible might affect your premium. You may save a few percentage points on your premium or only see a minimal difference.
If you are reluctant to make more minor claims, raising the deductible could be the right move for you.
Credit rating improvement
When determining your auto insurance rates, you should consider the driving history of each driver. Someone with a bad record of accidents can cost insurance companies a lot. Some insurance companies consider credit scores in determining premiums. Michael Barry, senior Vice President and Head of Media Relations of the Insurance Information Institute, says it like this:
Many insurers use insurance scores based on credit. In some statehouses, this is a controversial issue …[but] insurance companies will claim that their studies show that you are less likely to make claims if you are responsible in your private life.
You can access your credit scores for free through a credit card or bank. You can also check your credit reports for free at AnnualCreditReport.com.
Install anti-theft devices
Installing anti-theft systems could reduce your insurance premiums. GEICO will offer a “potential saving” of 23 percent if your vehicle has an anti-theft device. 7 You should be able to get specific information from your insurance provider about which devices are likely to reduce your rates. Consider asking about car alarms or LoJacks. It would be best to consider whether adding the device is worth the expense and effort.
Pay-as-you-go insurance is the way to go
Black Box Insurance may be an option for you if your driving is safe and you drive a low mileage. Allstate Drivewise is a good example. Sign up for Drivewise, and you’ll get a discount. You will also receive discounts every six months if you drive safely.
Your insurer must track your driving using a telemetric system installed in your vehicle. This allows them to gauge how often you drive and how well. This program could save you money if your annual mileage is less than 10,000.
