5 Tips for Saving Money on Car Insurance

Car insurance is a type of financial protection that covers you in case of an accident, theft, or damage to your vehicle. It can also cover your medical expenses, legal fees, or liability for injuring others or damaging their property. Car insurance is not only a legal requirement in most states, but also a smart way to protect yourself and your assets from unforeseen risks.

However, car insurance can also be quite expensive, depending on various factors such as your age, gender, location, vehicle type, coverage level, and driving record. According to the National Association of Insurance Commissioners, the average annual premium for car insurance in the US was $1,004.68 in 2019. That’s a lot of money to spend on something you hope you never have to use.

Fortunately, there are some ways you can save money on car insurance without compromising your coverage or peace of mind. In this article, we will share with you five tips that can help you lower your car insurance costs and keep more money in your pocket.

Tip 1: Compare quotes from different insurers

One of the easiest and most effective ways to save money on car insurance is to shop around and compare quotes from different insurers. Different insurers have different pricing policies and discounts, so you might find a better deal with another company than your current one. You can use online tools or brokers to compare quotes easily and quickly, or you can contact insurers directly and ask for their best offers.

By comparing quotes, you can find out which insurer offers the best coverage for your needs and budget. You can also negotiate with your current insurer and ask them to match or beat the lower quote you found elsewhere. According to Consumer Reports, drivers who compared rates saved an average of $221 per year on their car insurance premiums.

Tip 2: Choose a higher deductible

Another way to save money on car insurance is to choose a higher deductible. A deductible is the amount of money you have to pay out of pocket before your insurance kicks in and covers the rest of the claim. The higher your deductible, the lower your premium, because you are taking on more risk and responsibility for the cost of the claim.

However, choosing a higher deductible also means that you have to be prepared to pay more money in case of a claim. Therefore, you should only choose a higher deductible if you can afford to pay it and if you have a good driving record and a low chance of filing a claim. You should also have an emergency fund or savings account to cover the deductible if needed.

According to The Zebra, a car insurance comparison website, increasing your deductible from $500 to $1,000 can save you an average of $200 per year on your car insurance premium.

Tip 3: Bundle your policies

Another way to save money on car insurance is to bundle your policies. Bundling means buying more than one type of insurance from the same insurer, such as car, home, renters, or life insurance. By bundling your policies, you can lower your overall cost of insurance and simplify your payments and claims.

Insurers offer discounts for bundling because they want to retain more customers and sell more products. The more policies you bundle, the more you can save. According to Insurance.com, bundling car and home insurance can save you an average of 16% on your car insurance premium, while bundling car and renters insurance can save you an average of 8%.

Tip 4: Drive safely and maintain a good credit score

Another way to save money on car insurance is to drive safely and maintain a good credit score. Your driving history and credit score are two of the most important factors that affect your car insurance rates. Insurers use them to assess your risk level and likelihood of filing a claim.

By driving safely and avoiding accidents, tickets, or claims, you can prove to your insurer that you are a responsible driver and deserve a lower rate. You can also enroll in a defensive driving course or a telematics program that tracks your driving habits and rewards you for safe driving.

By maintaining a good credit score, you can show your insurer that you are financially responsible and reliable. You can improve your credit score by paying your bills on time, keeping your debt low, and checking your credit report regularly for errors.

According to The Zebra, drivers with no accidents or violations on their record save an average of $1,427 per year on their car insurance premiums, while drivers with excellent credit scores save an average of $1,674 per year compared to drivers with poor credit scores.

Tip 5: Ask for discounts

Another way to save money on car insurance is to ask for discounts. Insurers offer various discounts for different reasons, such as loyalty, safety features, low mileage, or affiliation. Some of the common discounts you can ask for are:

• Multi-car discount: If you insure more than one car with the same insurer, you can save up to 25% on your premium.
• Anti-theft discount: If you install an anti-theft device or system on your car, such as an alarm, a tracker, or a kill switch, you can save up to 10% on your premium.
• Low-mileage discount: If you drive less than the average driver, usually less than 12,000 miles per year, you can save up to 15% on your premium.
• Good student discount: If you are a student under 25 years old and have a GPA of 3.0 or higher, you can save up to 25% on your premium.
• Military discount: If you are an active-duty or retired member of the military or a veteran, you can save up to 15% on your premium.
• Affinity discount: If you belong to a certain group or organization, such as a college alumni association, a professional association, or a credit union, you can save up to 10% on your premium.

These are just some examples of the discounts you can ask for. You should contact your insurer and ask them about the available discounts and how to qualify for them. You might be surprised by how much you can save by applying them.

Conclusion

Saving money on car insurance is not impossible. By following these five tips, you can lower your car insurance costs and keep more money in your pocket. You can compare quotes from different insurers, choose a higher deductible, bundle your policies, drive safely and maintain a good credit score, and ask for discounts. By doing so, you can enjoy the benefits of car insurance without breaking the bank.

So what are you waiting for? Start saving money on car insurance today and see how much you can save. Remember, every dollar counts!