Many of us thinks that car insurance is just an expensive nuisance… until we need it.
But from experience, I learned that car insurance shouldn’t cost an arm and leg. Here are some tips to reduce car insurance premiums.
1. Get Multiple Quotes
A good starting point is to request quotes from multiple insurance companies. In the past, I didn’t do this. I just chose what I thought was good and stuck with the carrier for many years not realizing I was wasting money.
As part of car insurance study we conduct in California, my team found that by comparing quotes from different carrier a similar insurance policy can range from $19 a month up to $213. Use tools like this one to get multiple quotes online in minutes.
2. Consider the Car You Drive
Remember that the type of car you drive will affect the car insurance premium.
A study shows that depend on the car you’re driving, car insurance policy can ranged from $1,112 (Honda Odyssey LX) to $3,835 (Mercedes S65 AMG Convertible) a year.
This tool can help you estimate the cost of car insurance before buying it. Another option is to call your agent or carrier.
3. Adjust Your Deductible
Bear in mind that a $100 deductible is far too low for many. You shouldn’t set a deductible at $100 or $250 if you can handle a $1,000 loss because that would mean buying an insurance you don’t need.
There’s no definite answer on how much you can save by raising your deductibles and it’s best to consult your agents about it.
Actually, raising your deductibles from $500 to $1000 can help you save up to 9% in your car insurance.
4. Combine Policies
It will be easier for you to manage your finances if you combine all your insurance in one carrier. Another advantage in doing this is the possible discount you can get. I’m able to get a discount when we get home and auto insurance from one carrier.
5. Guard Your Credit
In many states, your credit history can affect your insurance premium. Studies show that how we handle our finances have a meaningful correlation on our claims history.
Consumer Reports study found that a poor credit score can cost a driver $1,513 more in annual premiums in the State of Virginia.
6. Claim Your Discounts
Check out the list of discounts you can get from your car insurance carrier:
- Accident Free
- Affinity–United States Chess Federation member
- Good Student
- Combining Home/Car
- Multi Car
- New Vehicle (a discount for insuring a car less than 5 years old)
- SmartRide (used by Nationwide to evaluate how safely you drive)
Call your insurance carrier or agent now to find out if there are additional discounts you can get.
7. Pay By the Mile
Pay insurance by mile can help you save money. Though it’s not available in every states, paying by miles can reduce the premium you pay by the miles you drive. A quote from leading pay-by-the-mile car insurance carrier shows that you only need to pay 3.2 cents per mile.
8. Reduce Your Coverage
Like raising your deductible, reducing your coverage can save money. There’s little need for you to insure a car against damage as your car age since the value of the car affect the possible reimbursement you can get from this kind of coverage.
9. Compare Prices Annually
Check out annual premium price every year to save money. You can do it online and comparing hurts won’t hurt your credit score.
10. Pay Semi-annually
You can save money by paying semi annualy in full rather than paying your insurance premium monthly.
11. Drive Safely
You can keep your premium low by avoiding accidents and traffic tickets. It’s also advisable to allow your carrier to monitor your driving habits to reduce premiums.
Progressive offers Snapshot and Nationwide offers SmartRide. They will ask you to plug a device into your car for several months and this will monitor your driving habits. Based on the results, cost of your auto insurance can decrease significantly.
In Conclusion, there are many ways to lower your rates. Most importantly, just do the work and don’t always trust your agents. It takes less than 2 hours and can save you $1,000s. Moreover, tools like this can do that work for you in under 5 minutes. With that kind of value, it’s well worth the time.