12 Clever Tips to Lower Your Auto Insurance Premium
Jaime Chaifetz January 04, 2019
When you’re building a career, a family, or a life on your own, every dollar in your budget counts. Everything is balanced against your after-taxes income. Where you can live, the kind of car you can drive, and what you can do for your evening recreation are determined by how your paycheck and expenses shake out. When you’re looking at every aspect of your budget to see what can be tightened, your insurance always winds up center-stage. Are you paying too much, could you be paying less, and is there a better way to configure your coverages and deductible to get a significantly better deal?
We believe in helping everyone find the best possible deal on auto insurance for your lifestyle, region, and vehicles. Today, we’re here to talk about ways you can effectively lower the cost of your personal and household auto insurance.
1) Be an Exemplary Customer
The most important thing to remember about saving money on any kind of insurance is that insurers care about reliability most of all. They want someone who is clearly incredibly responsible both behind the wheel and with their finances. This reduces the chances that they will have to pay for a collision or go after someone for unpaid bills. The best way to approach insurance is to make them want to compete for your business by being an exemplary customer. Not only should you keep your car out of trouble, but you also want to make sure to pay every bill on time in full, answer every message promptly, and always be polite with the service. This will reflect well on your credit and insurance history and will make your business very appealing to insurers.
2) Skip Collision and Comprehensive Coverage for Old Cars
Collision and comprehensive coverage are required by most banks and therefore the vast majority of cars still being paid off have these forms of insurance coverage. However, the maximum amount of payout you can get for collision or comprehensive coverage is equal to the amount of the car. This means that if you have an older car with a seriously depreciated value, no matter how well it runs, it may not be worth having these types of coverage on the vehicle. If the car is worth less than the deductible plus the amount you would pay for annual coverage, ditch those policies because they’re already a loss.
3) Strategically Raise Your Deductible
If you are a responsible driver with a reasonable amount of money in your savings, you can significantly lower the total cost of your insurance by raising your deductible even a little bit. Your deductible is the amount of money you pay before the insurance kicks in. A $100 deductible means that you pay the first $100 of repairs and insurance will pay for the rest up to the policy limit. If you can afford to do so, raising your deductible to $200 will mean paying a bit more if you ever do get into trouble while saving a lot more in your annual coverage costs. Raising your deductible is a great way to save money, but don’t raise it any higher than you can afford to cover whenever an accident might occur.
4) Get Usage-Based Insurance for Less Used Cars
Car insurance rates are based on a few simple assumptions. One of these assumptions is that you will be commuting at least an hour each way every day of the week. As it turns out, insurance companies give discounts to people who can prove that they drive their cars less than that. If you have a shorter commute, work at home, or even better, have a vehicle that you use very rarely as opposed to your everyday vehicle, using a GPS or OBD device in your vehicle can get you significant savings on insurance for any ‘under-used’ vehicle.
On the flip side of this advice, you should also know that an OBD device tracks not just your mileage but your speed, turn radius, and breaking force. If you like to drive your car intensely or, unfortunately, if you live in an area with terrifying roads and freeways, an OBD device can also serve to raise your insurance if the insurers discover that you drive in a ‘dangerous’ fashion even if your record is clean.
5) Don’t Get Insurance Services that You Already Have
A lot of people lose money to insurance ‘perks’ that they already have covered from another service. If your dealership warranty, AAA membership, or driver’s club services include things like oil changes and roadside assistance, you don’t need to get these services from your insurer as well. Take a careful look at any plan you’re considering and make sure to remove these options from the list of things you’re willing to pay for in a plan. These services can be incredibly valuable to new drivers who don’t have a driver’s club membership yet but for most adults, there’s no need to pay for duplicate services.
6) Buy Insurance as Your Most Responsible Household Member
When looking for insurance for a household, especially if every driver in the home tends to share the family cars, one driver tends to take the lead in auto insurance applications. While the other drivers listed will matter, the primary person will be the one most closely scrutinized in terms of their driving record and credit report. This means that no matter who is the most dominant personality in the house or the best technical driver, your lead family representative to insurance companies should be the most responsible person with the cleanest records. This will give you a good starting place with insurance companies and adding less reliable drivers to the plan will move from that point.
7) Send Everyone Back to Driver’s Ed
Most people know that driver’s education can make teen car insurance more affordable, but they don’t realize that this discount is actually available for everyone. Insurance companies like customers who have recently boned up on the legal rules of the road. While we all learn the customs of our regions, these often include little details like California stops and Chicago dibs. A driving refresher course will make everyone in your household a little more careful and aware of the road and proof of enrollment assures your insurance company that you are more affordable to insure.
The best part is that you don’t even have to go sit in a student driver vehicle or re-do your driving test. Most insurers will accept enrollment in one of the many online driving courses, some of which even have fun driving simulation games for virtual practice.
8) Don’t Allow Gaps in Insurance
Gaps in insurance aren’t just a gamble that you won’t get into an accident, they’re also a bad sign for insurers who both want your business and see irresponsibility as costly. Along those lines, there is a discount offered by many insurance companies for having continuous insurance for more than a year. The percent discount you receive is often based on the size of your liability coverage so this is a particularly effective tip for anyone who already has high liability coverage for other reasons.
9) Remember to Consider Local Insurers
One mistake that many people make is forgetting that there are more than just Geiko, Allstate, Progressive, and State Farm. While these are the big national insurance providers, often you will get much better balanced and more effectively personalized deals from small local insurance firms. Remember that because these companies have a smaller reach and fewer clients, it’s within their best interest to give you a good deal, as opposed to the mega-insurers who could take or leave any handful of customers.
Local insurers are also more likely to have options available that are well-suited to your regions like a startup service or snow rescue in cold climates or additional flooding damage in the hurricane belt.
10) Pay In Full for Your Policy Duration
When you buy a duration of insurance, you usually have two options for payment. You can either pay the entire cost up front or like a subscription each month. In general, insurance companies would rather you paid up front and often offer a discount for people who choose to do so. It’s worth your while to save up a sum for your next round of insurance ahead of time in order to get the discount.
11) Shop for Insurance When You Move
If you’re looking for a new home and debating which state to move to, you may want to factor in the price of insurance at your destination. Different states have different minimum insurance requirements and laws in place that can make insurance more or less expensive by default. Since you will need to change insurance policies, either way, make sure to get a picture of insurance in the region and get a complete look at local quotes anywhere you’re seriously considering moving to. Because of deals, you might get with local insurers, it’s also a good idea to reassess your policies even if you’re only moving a few cities over.
12) Always Compare Detailed Quotes Before Deciding
As a final note, it’s important to remember that insurance company policies, costs, available discounts, and bundle packages vary a great deal. If you want to get the best deal on reliable low-cost auto insurance, your best bet is to get a wide variety of quotes and then optimize your approach based on the responses. Don’t forget to factor in education, driving history, recent driving classes, good grades, and other possible discounts, as these are often available but not offered by default.
For more great tips on how to save money while getting the best insurance for your needs, contact us today!