When the national average for auto insurance is $1,621 a year, finding savings every way you can give your budget some breathing room. But there’s not much you can do about your insurance premiums, right?
Wrong.
There are lots of ways to cut the costs of your auto insurance premiums. In fact, there are things you can do today that will add up to real savings.
To help you stop asking the question, “Why is my car insurance so high?”, let’s look at ways to save you money.
Raise Your Deductible
When you need to make a claim, a deductible is what you pay before your insurance kicks in. In general, the lower your deductible, the higher your insurance premium.
When looking to cut costs, consider raising your deductible amount. Raising your deductible to $500 or even $1,000 could save you 15-40%, depending on your insurance coverage.
Just make sure you can afford to pay the deductible should you need to make a claim. Having a reserve amount set aside in savings can reduce the stress of paying a higher deductible. Plus, it gives you a lower insurance premium to pay.
Improve Your Credit Score
Many people don’t think their credit score has anything to do with their auto insurance premiums. When in fact, insurance companies use your credit history to help set your premium rates.
A good, solid credit history shows insurance companies that you are responsible in your personal life. A responsible adult is less likely to make auto claims. This will make you look like less of a risk and lower your premium costs.
To improve your credit score, pay all your bills on time. Keep the balances on your credit accounts low and don’t take out more credit than you need.
Ask About Discounts
Most insurance companies offer discounts to policyholders for things like a good driving record or having anti-theft devices on their cars. When looking for ways to save money, ask your agent what discounts you might qualify for.
Customers who have been with an insurance company for a long time will get loyalty discounts. Good students will get discounts for good grades. There are also discounts for customers over 50 years old.
Since different companies offer different discounts, it pays to talk to your agent. You might find one or two that will add up to decent savings on your premium.
Shop for a Good Rate
When you ask yourself, “Why is my car insurance so high?” the answer could be you’re with the wrong company. To make sure you’re paying a fair premium, always shop around to find the best rate.
First, know how much coverage you need and what features you don’t. Then use that information to compare rates from several different companies.
But don’t shop by rate alone. Ask friends and family who they use. Knowing that a company also has great customer service is worth paying a little more if necessary.
It’s also a good idea to shop for insurance BEFORE you buy a car. Certain cars, like sports cars, will always cost more in premiums. It’s better to know before you own the car than get surprised later on.
Reduce Coverage on Older Cars
As cars age, their values depreciate. That means older cars don’t need as much coverage as they once did, which could save you money.
For example, if a car’s value is $1,000, it doesn’t make sense to pay $500 a year in collision coverage. Insurance companies are likely to total older cars if they’re in an accident, so it may pay to drop comprehensive and collision coverage.
A good rule to follow is if your automobile is worth less than 10 times the premium, having comprehensive and/or collision isn’t cost-effective.
Bundle Your Coverage
It’s a safe bet that most people have more insurance policies than just auto coverage. Things like homeowner’s insurance, renter’s insurance, and life insurance are common as well.
If you have more than one policy, you could save money by bundling your policies together. Insurance companies that offer different types of coverage will give customers a discount if they bundle all their policies through them.
Plus, it makes paying for your policies easier when you’re dealing with only one insurance company.
Take a Defensive Driving Course
If you don’t have the best driving record but what to do what you can to change that, consider taking a defensive driving course. This not only helps teach you new driving skills, it shows your insurance company you mean business.
Look to see what defensive driving courses your area offers. You’ll need to have taken it recently to qualify for the discount with your insurance company.
Just make sure the cost of the course isn’t more than what you could save. Though, having the course cost offset your first year of savings will still net you savings for years after that.
Reduce Your Commute
Have a long commute to work? That could be showing in the amount you pay for auto insurance premiums.
The longer your commute means the longer you’ll be on the road. This increases the risk of accidents, which is why insurance companies will charge you more.
Consider carpooling, taking public transit, or even moving closer to work. Then update your insurance company on the miles you commute daily.
Don’t Pay Monthly
Paying your insurance premiums monthly might make it seem more financially manageable, but it’s actually costing you more money.
Insurance companies offer a discount if you pay your premium all at one time instead of breaking it up into monthly payments. That could save you a lot of money each year.
To make that one-time payment easy, make a monthly payment to your savings account, just like you would the insurance company. That way, once the yearly bill arrives, you’ll have no problem paying it… and saving on the premium at the same time.
You’ll Never Have to Ask, “Why is My Car Insurance so High?” Again
Put the days of wondering “Why is my car insurance so high?” to rest. By knowing how to cut costs, you can keep the coverage you need while also keeping more money in your pocket.
Ready to save on your auto insurance? Contact us today to request a quote!
