Most drivers don’t think about their car insurance policy until they’re involved in an accident, but if you’re like most people, your wallet might feel a pretty heavy sting when your premium is deducted from your bank account.
Luckily, most drivers can usually secure a lower rate for the same insurance, especially if they’ve gotten older, it’s been a long time since they’ve gotten a new quote or their driving record has improved. If you think that you might be overpaying for your car insurance, consider using some of our tips to search for a lower rate – you might be surprised at how much you can save with just a few hours of searching.
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How to Lower Car Insurance:
- Step 1: Ask for a higher deductible.
- Step 2: Shop around for a lower rate.
- Step 3: Bundle your home and auto insurance with a multi-policy discount.
- Step 4: Improve your credit score.
- Step 5: Ask about any discounts you might be missing.
- Step 6: Install an anti-theft device.
- Step 7: Consider insurance costs before you buy your next car.
How to Tell if You’re Paying Too Much for Your Car Insurance
You’ve Never Switched Your Car Insurance Provider or Gotten an Outside Quote
Do you know that the average driver has not switched his or her car insurance provider for over 12 years? If you think that your car insurance company is going to hand you a discount for loyalty, you’d be mistaken.
Car insurance providers rarely approach you with a discount, even if your driving situation has significantly improved over the years. Don’t be afraid to shop around for quotes from competitors using your most up-to-date information.
You’re Paying Much More than the Average Driver
Statistics show that the average car insurance cost is around $1,512 a year, or a monthly premium of $126.
Though the exact rate that you’ll pay will depend on a number of factors (including what state and city you live in, your age, and even your credit history) if you find yourself paying much more than the national average, it’s time to start searching for a new rate.
You’ve Stuck with Your Insurance Company Through a Move
Though most insurance providers will increase your rates when you move to a higher-risk area, you can expect that your insurance company will not offer you a lower rate if you move to a less incident-prone zone.
Cheap car insurance packages may be more readily available in your new location than your previous one. Whenever you move, you should consult with local car insurance providers to get a “feel” for the average quote in the area.
How to Lower Your Car Insurance Rate
Step 1: Ask for a Higher Deductible
The deductible is the amount that you are expected to pay for any damage to your vehicle before your insurance “kicks in” to foot the bill. As a general rule, the more you pay in a monthly premium, the lower your deductible will be in the event that you’re involved in an accident.
Requesting a higher deductible from your insurance provider may afford you a lower rate, as insurance companies know that you’ll be covering a higher percentage of your bill if your vehicle is damaged.
Step 2: Shop Around for a Lower Rate
A lot of things in your life have probably changed since you originally signed up for your car insurance package. You may have gotten married, switched the type of car that you drive, or moved into a new zip code. Every insurance company uses its own unique formula to calculate how much you’ll pay.
If it’s been a few years since you went shopping for insurance, secure at least three quotes from competing insurance companies and see how they compare to your current rate.
If you’re satisfied with your current insurance provider’s services but you’ve still found a quote for a lower rate, don’t be afraid to negotiate. Insurance providers know that it’s much riskier to extend coverage to a new driver than it is to keep on an old one, and the best car insurance companies often offer to match or beat the rates of their competitors if they catch wind that you’re thinking about making a switch.
Step 3: Bundle Your Home and Auto Insurance with a Multi-Policy Discount
Some insurance companies offer you a discount if you bundle your insurance together and purchase them both from the same provider. Additionally, your insurance company may also offer you a discount if you insure multiple cars or drivers on a single policy.
Contact your insurance provider and tell them that you are considering adding your home or renter’s insurance to your current car insurance package and ask about any discounts you can secure by bundling.
Step 4: Improve Your Credit Score
Though most drivers aren’t fond of the practice, car insurance companies heavily factor your credit score into the calculation of your premium. This is because research shows that drivers who maintain high credit scores tend to be more responsible when it comes to vehicle maintenance and driving habits, lowering the possibility that the driver will be involved in an accident.
To protect your credit score, keep a low balance on your credit cards and remember to make your payments a few days before they are due. If your credit score has taken a hit because you have trouble remembering your payment due dates, consider authorizing minimum payments through your credit provider’s autopay system if it is offered.
For more tips on how you can improve your credit score this year, check out Benzinga’s guide. If you are able to improve your score from a classification of “poor” (under 600) to “good” (700 or above), you’re most likely to see big savings.
Step 5: Ask About Any Discounts You Might Be Missing
Each car insurance provider has its own set of discounts and you might qualify for more than you think.
From low-mileage discounts that offer savings to drivers with a short commute to teen discounts for good grades and car insurance savings, call your insurance provider and ask about new discounts that have been recently added or ask to take a look at your account and locate opportunities to save.
Step 6: Install an Anti-Theft Device
Many insurance companies offer discounts to drivers who purchase vehicles with comprehensive anti-theft systems or who have aftermarket anti-theft systems installed. If you have comprehensive auto insurance in addition to standard collision insurance, you may be able to save even more. Contact your insurance provider and ask about premium discounts for anti-theft device installation.
Step 7: Consider Insurance Costs Before You Buy Your Next Car
The price of your car, the likelihood of theft, and the car’s safety ratings all heavily factor into the cost of insurance. If you’re currently shopping for a new car, view crash-test data from the Insurance Institute for Highway Safety before making the decision to buy.
Where To Get an Insurance Quote
Regularly request quotes from competing car insurance providers, even if you would like to stay with your current insurance package. Finding a number of quotes will ensure that you’re not being overcharged for your insurance and can also offer leverage for you to negotiate a lower rate with your insurance provider.
To secure a quote, research your area’s local providers and either give them a call or visit them online and request a quote; many car insurance companies have added online tools to their website that use algorithms to provide you with an estimated premium in as little as a few minutes. The more quotes you find, the better your chances are at securing the best possible rate, so make sure to consult with at least three insurance companies before you sign on.
Some questions you may want to ask your insurance agents include:
- Do you offer discounts for insurance bundles or packages?
- What types of discounts am I eligible for?
- What is my risk assessment? How did you arrive at this number? What factors do you use to determine a quote?
- Do you have a physical office where I can meet with you to discuss my policy options?
- How much would this premium increase if I were to move? What if I were to add another driver to my policy?
- If my car insurance provider charges a fee for stopping coverage before the terms of my policy, will your company help to cover this cost if I switch to you?
Getting the Best Car Insurance Rate
Whether you’re getting insured for the first time or you’re considering changing insurance providers, you should leave yourself plenty of room to research your options before you need to make a choice. Remember to thoroughly read every policy that you’re seriously considering and to never cancel coverage before you have secured a new car insurance policy.
There’s nothing worse than signing up for a new, less expensive policy only to find that your insurance doesn’t cover all of the hazards you need.