Drivers must have auto insurance, but it does not have to be prohibitively expensive. By following these simple tips, you can save money on your auto insurance premiums while still maintaining the coverage you need.
Shop Around for the Best Rates
Insurance rates can vary widely between companies, so it pays to compare quotes from multiple insurers. Use online comparison tools or work with an independent insurance agent who can gather quotes for you. Look not only at the premium cost but also at the coverage limits and deductibles offered.
Bundle Your Policies
Many insurance companies provide savings for bundling your auto insurance with other plans, such as homes or renters insurance. Bundling can result in significant savings, so check with your current insurer or others to see what discounts are available.
Maintain a Good Driving Record
Your driving history has a significant impact on your insurance rates. Drivers with a clean record (no accidents or traffic violations) typically pay lower rates. Practice safe driving habits, obey traffic laws, and avoid speeding tickets to keep your record clean and your premiums down.
Increase Your Deductible
The deductible is the amount you pay out of pocket before your insurance coverage kicks in after a claim. Choosing a higher deductible can lower your premium. Just make sure you have enough savings set aside to cover the deductible in case you need to file a claim.
Consider the Type of Vehicle You Drive
Certain vehicles cost more to insure than others due to factors like repair costs, theft rates, and safety ratings. Before purchasing a car, research insurance costs for different models. Generally, older and less expensive cars are cheaper to insure than newer, high-performance vehicles.
Take Advantage of Discounts
Insurance companies provide a variety of discounts that might help reduce your rate. These may include discounts for safe driving courses, anti-theft devices installed in your vehicle, low mileage, and being a student with good grades. Ask your insurer about available discounts and see which ones you qualify for.
Review Your Coverage Regularly
As your circumstances change, so will your insurance requirements. Review your policy annually to ensure you have adequate coverage without paying for unnecessary extras. For example, if you’ve paid off your automobile loan, you could no longer want comprehensive and collision coverage.
Maintain Good Credit
In several states, insurers utilize credit-based insurance ratings to determine premiums. Pay your bills on time, keep your credit card balances low, and monitor your credit report for errors to help maintain a good credit score, which can result in lower insurance rates.
Drive Less
Some insurers offer discounts for drivers who drive fewer miles each year. If you work from home, use public transportation, or carpool, you may qualify for a low-mileage discount. Be sure to accurately report your annual mileage to your insurer to potentially lower your premium.
Consider Usage-Based Insurance
Usage-based insurance programs use telematics devices or smartphone apps to monitor your driving habits, such as speed, braking, and mileage. Safe drivers may receive discounts based on their actual driving behavior rather than general demographics.