Having car insurance can save you a lot in the long run. Depending on your policy, it can pay for everything from medical bills to replacing your car after a crash. Having car insurance is the smart choice – but car insurance premiums can add up, and it seems like they get higher every year. Finding ways to save money on car insurance costs is smart, too. Read on for cost-cutting tips from the insurance professionals at Surround Insurance.
How can I cut my car insurance costs?
Lower your rates with a clean driving record
Car accidents cost money, and insurers usually need to foot the bill. Insurance professionals know that you’ll cost less to insure if you’re less likely to get into an accident. If you have a safe driving history, you can earn a lower rate. To keep your driving record clean:
- Be responsible on the road.
- Keep your wits about you – if you’ve been drinking or had an edible, don’t get in the driver’s seat.
- Look twice for cyclists and pedestrians.
- Follow traffic laws.
Driving is one of the few parts of life where it’s good to be boring.
File fewer claims to help you save on car insurance
Claims cost insurance companies money. Insurance companies offer better rates to drivers with fewer insurance claims in their recent history. You can dodge premium increases by avoiding filing claims.
Don’t take this too far, though. Living with a dent in your car instead of filing a claim for body work is reasonable. But living with a safety issue after an accident instead of filing a claim is dangerous.
Earn good driving discounts with your skills
Some insurance companies will give you a discount for taking an accredited defensive driving course. In a defensive driving course, you might learn how to reduce your risk of accidents, manage anxiety and road rage, and drive more safely. Talk to your insurance professional to determine possible discounts and courses approved by your insurance company.
Another way to save money through good driving is with telematics. With telematics, you download an app or install a device into your car. The app or device tracks your driving and sends the results to your insurer. If you drive safely, your insurer will grant you a discount.
Ace your way into a good grade discount or use your degree to save
Did you know students can get a discount on their car insurance for doing well in school? Some insurers offer a discount to high school and college students who maintain a B average or a 3.0 GPA, appear on the dean’s list, or make honor roll. Study up on good student discounts here.
College students can also look forward to slight savings when they earn their degree. Even graduating from high school or getting a GED can save you a few dollars.
Drop coverages you don’t need
Examine the types of coverage on your policy. You might be able to save money by dropping ones that don’t make sense. If you’re part of a motor club with roadside assistance, you don’t need roadside assistance coverage. If you have multiple cars, rental reimbursement coverage might be redundant.
If your car is old and you own it outright, you could drop comprehensive and collision coverage. Collision and comprehensive coverage cost a lot per year. If your car is low-value, you’ll quickly spend more on premiums than you would get if your car gets totaled in an accident. If you lease or finance your vehicle, check the lender’s rules about insurance before you drop any coverages.
Raise your deductibles to lower your premiums
A deductible is the amount you pay out of pocket before insurance coverage begins to pay for a claim. Each coverage has its own deductible. You might have a $500 deductible for collision coverage and a $500 deductible for comprehensive coverage. If you file a collision claim, you pay $500 for repairs before your insurance policy steps in to pay for the rest.
One way to save money on car insurance premiums is to raise your deductibles. To make sure raising your deductibles is worth it, check with your agent to see how much you could save.
Bundle insurance or insure multiple cars for a discount
Many insurers offer savings for customers who bundle their car insurance. You could save up to 25 percent by bundling your car insurance with your renter’s, home, or life insurance.
You can also earn a multi-car discount by insuring multiple vehicles through one company. For a multi-car plan, you and the other drivers need to co-own the vehicles or be family/spouses living together.
Reduce your mileage
It’s simple math: the fewer miles you drive, the less likely you are to get into an accident. Infrequent and low-mileage drivers usually have lower car insurance premiums. However, you might need to drive significantly less to qualify for a lower premium. Ask your insurer about the mileage cutoff before reducing your mileage.
Drive a less expensive car or earn a green discount
A brand-new pickup truck is much more expensive to insure than a 10-year-old sedan. Since the sedan’s actual cash value (ACV) is lower, an insurance company will see it as less of a financial risk to insure. If you’re car shopping, opting for a lower-cost car could help you save money. Safety is a factor, too. You won’t save as much if you get a car in poor condition or without safety features like side curtain airbags.
Depending on your insurer, you might also earn a discount for owning a hybrid or electric vehicle. Plus, you’ll save money on gas!
Demonstrate financial responsibility
In some states, insurance companies adjust your premium based on your credit score. The better your credit is, the better a deal you could get. Insurers have seen a correlation between credit scores and the amount of claims filed. They perceive customers with higher credit scores as safer and cheaper to insure.
Some states, including Massachusetts, where Surround Insurance HQ is located, have banned this practice. Look up the laws in your state to see if improving your credit score could help you save money on your auto policy.
Maintain insurance even when you don’t own a car
If you’re carless right now, you can save money in the future by buying a non-owned car insurance policy. Insurers have found that customers who keep car insurance all the time have fewer accidents than people who’ve never had insurance before or who have a big gap in their insurance history. You could save up to 30 percent on car insurance with a continuous insurance discount.
Consider insurance rates when you move
Cities and states around the country have different average insurance rates. For example, drivers in Maine pay an average of $949 per year for car insurance. Move south to Florida, and the average rate more than doubles, reaching $2,551. Factors like accident and crime rates, the average number of claims customers file, and the cost of repairing or replacing a car all affect the cost of insurance.
When relocating, you’ll probably choose based on where your friends, family, and job are. But knowing that car insurance rates differ by region can help you decide.
Keep your car from being stolen
Some insurance companies will lower your premium if you add an anti-theft device like LoJack or a car alarm to your car. Ask your insurer which anti-theft system or device they would reduce your premium for. Before installing an anti-theft device, compare its cost with the amount you would save on your premium.
Shop around for better car insurance rates
Just like when you shop for other services, comparison shopping can help you save money on your car insurance. Each car insurance company is different, so exploring multiple quotes lets you find the best deal. An independent insurance agent can help you get quotes from several companies and compare policies.
Ask your agent about more discounts
Ask your insurance agent whether any of the insurers you’re looking at offer additional discounts. You could earn special discounts for being a member of the military or certain organizations, being a federal employee, setting up autopay or paying your annual insurance premium in full. You won’t know unless you ask!
Saving money on car insurance doesn’t have to be hard
Car insurance costs can be a bummer. Luckily, there are plenty of ways to save money on your car insurance. We know this is a long list – don’t try to do everything on it at once! Instead, pick one or two strategies to work on. If you’re not sure where to start, or you want to compare quotes or learn about discounts, contact one of Surround’s insurance professionals. We’re here to help.