Auto insurance is a necessary expense for car owners. Not only is it required by law in most states, it also protects you from liability and costly damages in the event of an accident.
But just because you have good car insurance doesn’t mean you have to pay high premiums. In fact, many car owners actually overpay for their insurance and don’t realize it.
What you can do to lower your car insurance premiums
Luckily, premiums are based on many factors, and it’s actually quite easy to lower your premiums to reduce your overall costs. Think your car insurance premiums are too high? Here are six strategies that may help.
- Buy and compare insurance companies often
- Don’t pay unnecessary premiums
- Bundle insurance plans
- raise credit score
- increase the deductible
- be a good driver
1. Buy and compare insurance companies often
Auto insurance is not something to set up and forget. When things change even slightly, you’ll want to shop at different locations to make sure you’re getting the best deals.
“Premiums can vary from a few dollars to hundreds of dollars,” said PJ Miller, an independent insurance agent at Wallace & Turner Insurance. With multiple cars and high-risk drivers, the difference could be in the thousands, he said.
If you haven’t seen how your current policies stack up against your other options lately, shop now with Credible. If you want the best rates, it’s important to compare options regularly. This is especially important if your credit score changes or you are eligible for new discounts.
2. Don’t pay unnecessary premiums
Of course, you should have the minimum insurance required by your state and auto loan company, but beyond that, choose your additional coverage carefully. Underinsured car insurance, tow trucks, rental car support, etc. are convenient, but there is a big difference in insurance premiums.
“Get rid of coverage when you don’t need it,” says Miller. “Older cars may not need collision coverage. If you have not already removed physical damage coverage (inclusive and collision coverage) to reduce costs, it may be something to consider.” I have.”
Start with the coverage you really need and carefully consider other options. For example, if you don’t drive a lot, you probably don’t need roadside assistance. If your car is on the older side, you probably don’t even need collision compensation – replacing your car if it’s totaled.
Credible helps connect you with insurance brokers who can compare premiums instantly.
This is the best way to lower car insurance premiums
3. Bundle insurance plans
Most insurance companies offer discounts if you have multiple policies. So if you own a house or a motorcycle, or need life insurance, consider using the same company for all your insurance.
“Combine your coverage,” Miller explained. “Bundle your auto insurance with your home or renters insurance. Showing loyalty to one insurance company can help you get discounts, especially if you have multiple policies.” .”
If you want to compare premium vs. discount, start with Credible. The rate shopping marketplace allows you to get multiple quotes at once using one form.
4. Improve your credit score
“Most carriers use credit as part of their rate-setting process where the law allows it,” said Miller. “It’s thought to be part of the rate calculation, but most people believe it plays an important role in determining the price.”
Simply put? Maintain a good credit score if you want lower premiums.
To do this, pay your bills on time every time and try to reduce your balance. They also need to pull credit reports, notify credit bureaus of errors, and ensure collections and delinquent accounts are settled.
How to get a free credit report
5. Raise your deductible
An easy way to reduce your insurance premiums (car, home, rental, etc.) is to increase your deductible (the amount you pay per claim before your insurance applies).
Generally speaking, the higher the deductible, i.e. the higher the out-of-pocket amount, the lower the premium.
If you change your deductible from $500 to $1,000 this way, keep a little extra cash in your bank just in case. If you need to file a claim, you will have to pay an additional $500 before insurance will cover the damage.
6. Be a good driver
There are two reasons why being a good driver increases insurance premiums. First, you can get a discount. Many insurance companies offer discounts on premiums for uninsured periods. According to Miller, “Being a safer driver can save you about 5% on car insurance.”
Claims and tickets increase insurance premiums, so smart driving habits protect the premiums you already have.
“Slow down,” Miller warned. “Speeding tickets can have a dramatic impact on fares.”
Auto insurance rates depend on a number of factors, including creditworthiness, driving habits, and insurance company. Use a tool like Credible to lower your car insurance premiums today.
3 ways to lower car insurance premiums