Are you paying too much for auto insurance?
Join the club. Millions of drivers are paying more than necessary for auto insurance coverage, and most don’t even know it.
Reducing your auto insurance costs is not rocket science. In fact, you can begin the process today.
Not convinced? These 11 tips to lower your auto insurance premiums really do work, if you’re willing to expend the energy necessary to see them through.
1. Understand the Anatomy of Your Auto Insurance Policy
If you’re like most drivers, you probably don’t give your auto insurance policy documents a second thought. You pay your premiums and expect that your insurer will give you a fair shake when you file a claim.
You’re missing out. Every auto policyholder should take the time to become familiar with what’s in their policy, if only because tweaking or reducing coverage is the easiest way to significantly reduce premium costs.
Common auto insurance coverages include:
- Liability coverage, subdivided into personal property and bodily injury (medical expense) liability
- Uninsured/underinsured motorist coverage, which protects you when you’re involved in a crash with driver carrying inadequate insurance (or no insurance at all)
- Personal injury protection, which provides an additional layer of medical expense protection in serious crashes
- Medical payments coverage, another type of coverage for accident-related injuries
- Collision coverage, which may cover the cost of vehicle repairs after a crash
- Comprehensive coverage, which may cover vehicle repairs not directly related to a crash
You’re legally required to carry liability and uninsured/underinsured motorist coverage, but you may not need much more than that if your top priority is reducing your annual auto insurance premiums. If you’re not sure exactly how much coverage you need, ask your insurer.
2. Find an Insurance Provider That Offers Low-Cost, High-Quality Solutions
Not all auto insurers offer the same value. If your goal is to reduce your auto insurance premiums, look for an insurance provider that’s willing to work with you toward that end. National insurance providers like Freeway Insurance can provide lower-cost auto insurance solutions that still deliver what you need for optimal financial protection.
3. Don’t Say “Yes” to Unnecessary Coverages
This tip is a lot easier to follow when you’re familiar with the anatomy of your insurance policy. Do your best to resist upselling by your insurer — yes, they have your best interests at heart, but you know your budget better than anyone else. If and when your financial circumstances change, you can always reassess your coverage levels.
4. Consider a Higher Deductible
Your policy deductibles, or the amount you must pay out of pocket before your policy’s coverage kicks in, can dramatically impact your premium costs. Higher deductibles mean lower premiums, and vice versa. Your deductibles don’t have to be constant across the board; many drivers choose lower collision deductibles and higher comprehensive deductibles.
5. Practice Safe Driving Habits
The best way to avoid an unpleasant uptick in your premium costs is to avoid getting into an accident. While you can’t control what other drivers do, the best way to avoid getting into an accident is to practice safe driving habits.
Other steps to reduce your risk of an accident include avoiding the roads late at night, when driving is more dangerous. Unless you have claim forgiveness, even one claim on your policy could result in higher premiums.
6. Consent to Safe Driving Verification
Many insurance providers offer safe driving verification programs. The details vary, but these programs usually require you to place a monitoring device in your vehicle for a month or two, during which your insurer will log driving data and determine whether you qualify for a safe driving discount (and, if so, for how much).
7. Enroll in a Defensive Driving Class
Further boost your safe driving skills by enrolling in a defensive driving class. Your insurer could offer a discount if you can prove that you’ve successfully completed such a class.
8. If You’re in School (Or Have a Student on Your Policy), Keep Your Grades Up
Many insurers offer good student discounts for student drivers with high GPAs, usually above 3.0. While the absolute size of the discount might not be huge, this is yet another incentive to mind your studies.
9. Drive Less, Save More
Most insurers have low mileage discounts for drivers with short commutes. If you live close to where you work, or you don’t regularly drive to work, you may get a big break on your auto insurance premiums.
10. Bundle Multiple Insurance Policies With the Same Insurer
Policy bundles are another great way to save. Consider packaging your auto insurance policy with your homeowners’ or renters’ policy, to start. If you have other forms of insurance, such as life insurance, you may qualify for additional discounts as well.
11. Work to Improve Your Credit Score
Your credit history affects your insurance premiums: lower credit scores may mean higher premiums, and vice versa. While you won’t dramatically improve your score overnight, taking steps to raise it now may reduce your premiums over time.
Your Budget Deserves a Break
Your monthly auto insurance premiums no doubt account for a notable portion of your take-home pay. They probably don’t represent your largest household expense, however. That honor is likely taken by your housing payment, either mortgage or rent, or perhaps — if you’ve attended professional school — your student loan payments.
As far as non-negotiable budget expenses go, these items are just the beginning. You must also consider your monthly grocery bill, which you can reduce with smart buying decisions but will never eliminate altogether. You certainly have utility payments to worry about. You most likely have other forms of insurance, including health insurance, which can be quite expensive for individuals with pre-existing conditions or non-employer policies.
All this is to say that your budget deserves every break it can get. And that’s why it’s so important to choose a well-regarded insurance provider willing to work with you to provide the insurance solutions you need — and nothing you don’t.
Once you’ve found your ideal match, get to work on these strategies to reduce your auto insurance premiums. Saving money every day is easier than you might believe, and it feels great.
