How to Save Money on Auto Insurance
There are multiple ways to save on your monthly premiums.
Does avoiding accidents help you save money on auto insurance?
Fewer accidents and moving violations mean fewer claims. So yes, many insurers offer discounts to drivers with a good driving record. Different insurance companies have different criteria. You may qualify, for example, if you’ve been accident-free for a year. If you have a clean driving record, ask your insurance agent about safe driver discounts.
Some insurance companies offer a discount if you let them track your driving. They may monitor your driving habits via an app or a device that plugs into your vehicle. Make sure you understand which behaviors could hike your car insurance premiums.
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If your annual mileage is low, can you get a lower premium?
The less you drive, the lower your risk of an accident. So check your mileage.
If your annual mileage is low—under 10,000 miles a year—ask about low mileage discounts. If you don’t drive often, you might also want to raise your deductible to lower your premiums.
How does the vehicle you drive affect your car insurance rates?
The vehicle you drive affects your insurance premiums in various ways.
The Model’s Claim History
Some vehicles have higher claim rates, leading to higher insurance premiums. Or, if repairs are typically more expensive for your particular model, collision and comprehensive coverage may be more expensive, too. The Insurance Institute of Highway Safety publishes claim rates for various passenger vehicles.
Safety Features
A car equipped with safety devices like airbags, collision warning systems, and blind spot detection may get an insurance discount.
Your Vehicle’s Value
If your car is expensive or costs a lot to fix, you’ll likely have a higher insurance premium if you buy collision and comprehensive insurance. Older vehicles tend to have lower premiums.
If your car’s market value is less than 10 times the annual auto insurance premium, Kelley Blue Book suggests that you drop collision coverage.
Are there other available discounts for auto insurance?
Yes, here are some other ways to reduce your auto insurance costs.
Good Credit Score
Most insurance companies consider a driver’s credit information when determining their auto insurance rates. A good credit score can translate to lower car insurance premiums.
Multipolicy Discount
If you buy auto coverage from one insurance company and home insurance from another, you may be overspending. Buy two (or more) policies with the same insurer and you could get a bundling discount.
Paperless Billing
Some insurance companies give you a discount if you switch to paperless billing. It’s an easy way to save money (and trees).
A Higher Deductible
Opting for a higher deductible may lower your monthly premiums. When you file a claim, you pay a portion (the deductible) before your insurance starts paying. Let’s say you have an accident and your car needs $3,500 worth of repairs. If your insurance policy’s deductible is $500, you would pay $500 and your insurer would pay the remaining $3,000.
If you choose a higher deductible and then have an accident, you will pay more out of pocket. But if you have a good driving record, you might consider raising your deductible
Defensive Driving Course
Safe driving lowers your risk of an accident. So many insurance companies offer a discount to drivers who have completed a defensive driving course. These courses prepare you for various driving scenarios—so you won't just save money, you'll also learn to stay safe on the road.
Good Grades
Young drivers have higher car insurance costs, but companies often offer discounts to young drivers who get good grades. When comparing insurance costs, ask an agent about good student discounts.
As you price out auto insurance policies and compare quotes, avoid choosing the cheapest policy without considering the big picture. Make sure your insurance needs are met and work with a company you trust.
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