49 out of the 50 states in the United States require you to have car insurance in order to go behind the wheels. It is necessary to safeguard you financially while driving, and whether you have basic liability insurance or comprehensive vehicle coverage, it’s critical to shop around to get the best cost. No one wants to spend more than they need to, so here are ten effective ways to cut your vehicle insurance prices.
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Improve Your Credit Score
Time and again, we at WealthVipe have emphasized the importance of improving your credit score and here is another to add to that list. Like it or not, your credit score will significantly impact the rate you have to pay for your car insurance. Your credit card score gives useful insight into your financial circumstances and allows insurance companies to understand how likely you are to pay off your monthly premiums on time. Insurance companies also claim a correlation between customers’ credit score and their chances of submitting insurance claims. Therefore, you are likely to get better rates on car insurance premiums if you have an excellent credit score, ideally above 750 points. But if your score gets below 640, you are likely to pay inflated insurance rates.
Only Buy the Coverage You Need
Do you need comprehensive and collision coverage?
Collision coverage compensates for damage to your vehicle caused by another vehicle or an obstacle like a fence. In contrast, comprehensive coverage protects your vehicle from weather, animal collisions, floods, fire, and vandalism. It also covers the cost in case your car gets stolen, making it a very important coverage to have for new car owners.
However, the maximum reimbursement under either insurance you can get is restricted by the car’s worth. So a new car under the insurance plan will get significantly more during an insurance claim than an old car. So, it may not make sense to pay for these forms of coverage if your car is outdated and has a low market value.
Raise Your Deductible
When purchasing car insurance, you often have the option of picking a deductible, which is the amount of money you must pay before insurance covers the cost of repairs in the case of an accident, theft, or other sorts of vehicle damage. For example, if you have $1000 set as your deductible and claim insurance of $2500, your insurance provider will be liable for $1500 only and the rest of $1000 you have to cut from your own pocket. Deductibles typically vary from $250 to $1,000, depending on the coverage. The catch is that the smaller the deductible, the higher the annual premium in general.
Conversely, the cheaper the premium, the greater the deductible. Inquire your insurance agent about how raising your deductible can affect your rate. It might lower your annual premium by several percentage points, putting money back in your pocket. If you are confident with your driving and are hesitant to submit minor claims because you don’t want your premium to go up, increasing your deductible can be a good idea and a great way to reduce monthly insurance premiums.
Get Discounts for Installing Anti-Theft Devices
Another effective way to significantly reduce your insurance rates is by installing Anti-Theft Devices on your car. Major insurance providers like Esurance and GEICO, and Liberty Mutual offer savings if you have anti-theft devices set up in your vehicle.
Your insurance provider should be able to inform you which devices, if installed, can help you save money on your rates. Car alarms and passive disabling devices are two sorts of gadgets you should look into.
But installing anti-theft devices can be a bit expensive so if saving money is your primary concern, consult with your provider on the actual savings before proceeding.
Consider Taking Driving Courses
Completing authorized driving courses can lower your insurance premiums. There are several driving courses that you can take, like defensive driving, accident prevention, or other courses, to reduce your insurance rates.
Before you sign up for a class, though, make sure to ask your agent or insurance provider about this discount. After all, it’s critical that the time and money spent on the course result in significant insurance savings. It’s also essential that the driver enrolls in an approved course. Every state has its own regulations for authorized defensive driving classes; for example, Esurance provides a three-year defensive driving discount of up to 10%. It is most commonly used by drivers who are 50 years or older. Drivers of all ages in New York, New Jersey, Georgia, and Oklahoma may take advantage of Esurance’s defensive driver discount. South Carolina only requires drivers to be 25 years old or older.
Shop Around for Better Car Insurance Rates
If your coverage is due to expire and the annual premium has increased significantly, it may be a good idea to shop around and get quotes from several other firms. Also, every year or two, it’s probably a good idea to get quotations from different firms to see if there’s a better deal out there for you to grab.
But remember that cheap doesn’t necessarily make a company better, and choosing the most affordable firm isn’t always the best option. This is because the creditworthiness of the insurer should also be taken into account. Try to find a balance between price and trustworthiness when deciding on a car insurer.
Purchase Both Your House and Vehicle Insurance from the Same Company
If you get two or more types of insurance like homeowners insurance or car insurance from the same insurers, you may be eligible for a good discount. Also, if you insure more than one car with the same company, you may be eligible for further discounts as well.
Some insurers provide discounts to customers who have been with them for a long period. However, it’s still a good idea to shop around. So look for better deals and ask what the maximum discounts the insurer can provide.
Drive a Smaller Vehicle
While purchasing a large SUV may seem appealing, insuring the top-of-the-line vehicle might be more costly than insuring a low-cost commuter car. If you acquire a hybrid or alternative fuel car, some insurers may give you a discount. Farmers, and Travelers, for instance, give up to 10% discounts.
You may feel good about helping the environment while still saving money on insurance. Before making a purchase, find out the specific insurance costs for the various cars you’re considering. It is also worth pointing out that a cheaper car does not always translate into a lower insurance premium. Specific models of vehicles may have a history of accidents which can cause the insurance prices to go up. So it is worth considering the exact premium you may have to pay before considering a new car.
Get Rid of Any Coverage You Don’t Think You’ll Need
You may not require all of the policy’s features, such as roadside assistance and automobile rental coverage. Go over your insurance policy line by line and ask if anything you don’t need may be removed; you will be surprised at how much you can save by opting out of policies you do not need.
Consider Usage-Based or Pay-Per-Mile Insurance
If you are a safe driver and do not often go behind the wheel, it can be good to check usage-based insurance programs like the ones offered in Allstate’s Drivewise program. By enrolling in these programs, you give your insurance permission to track your driving in return for future discounts depending on how much, when, and how well you drive.
How Much Can You Possibly Save?
How much you can possibly save following these tips will depend on how much you are currently paying. Every car insurance rate varies based on your state, the insurance company you have chosen, and the type of coverage they have. However, knowing that, on average, a typical person spends around $1600 annually on car insurance, you can save anywhere from 5% to 25% following our tips. That is more than $400 saved annually.
Bottom Line
Car insurance rates increased 30% between 2014 and 2018, according to NAIC statistics. It is predicted that insurance premiums will continue to rise in the future as well. There are, however, a number of things you may do to lessen the sting. These ten pointers should help you get on the right track. Remember to shop around for the best auto insurance companies to discover one that meets your demands and matches your budget. Also, some of these techniques can be used to reduce other types of insurance as well, so use your best judgment. To learn more about saving on your insurance, follow our daily blogs.
