While the average American only spends 2.4% of their annual earnings on car insurance it is $140 per month. This makes sense, so most drivers try to save as much money as possible. There are many ways to lower this expense, regardless of whether you live in an area with the lowest car insurance rates.
While finding affordable carriers can be a great first step, it’s not the only way to cut down on your auto insurance premiums. There are simple ways to reduce the cost of car insurance and make more money. Bankrate’s editorial team in insurance has compiled a list of tips to lower your car insurance costs.
How to lower your car insurance
There are many car insurance providers that you can choose from in order to get the best rates. However, there are other options to make car insurance more affordable.
Take a look around
Although all policies provide coverage for vehicle-related accidents and liability, they are not structured in the same way. You may be surprised at how different factors can impact your rates. Each insurance company assesses risk differently, so factors like your zip code or driving record can have an impact on the rates you receive from different companies. Request quotes from multiple providers for the same coverage amount to find out which one offers the best rate.
It could be useful to compare quotes when renewing a policy. There is always the chance that your current insurance company may not offer the best rate or the coverage you require. You can compare prices to see if you’re paying too much car insurance.
Below is a table that shows the country’s top insurance companies ranked by market share and average premiums as of 2021.
Insurance companies often offer discounts that can be combined to make even greater savings.
These are the top car insurance discount:
- Low mileage discount: This is a way to save money by driving less than a certain amount of miles each year, as determined by your insurer.
- Multiple policy discount: Insuring multiple policies under the same company could help you save money. The best savings are often found when you bundle your auto and home insurance.
- Driving record clean: This could help you save money. You may also receive an additional discount if you have a clean driving record.
- Safety feature discount: A vehicle with safety features like anti-lock brakes or anti-theft devices could help you save money.
- Discounts based on profession: If you’re a teacher or a doctor, you could be eligible for a discount.
- Good student discount While younger drivers are more expensive to insure, good student discounts can help lower that cost. Insurers will often offer a discount for students who have attained a minimum B average in school.
Reassess your insurance coverage
It is important to have as much financial protection as possible in the event of an accident. Most people choose to buy both collision and comprehensive coverage, also known as full coverage, when buying car insurance. This may not be the best option for older vehicles.
It is possible to purchase comprehensive and collision coverage on a high-depreciated vehicle. However, insurers usually only pay up to the actual cash worth of your vehicle. If the amount that your insurance company would pay you for your vehicle’s total loss is less than your annual premium, then you may end up paying more for collision and comprehensive coverage. liability-only coverage does not provide protection for vehicle damage, but it can help you protect against lawsuits and medical expenses. To determine the right coverage for you, it is a good idea to consult an insurance agent.
Your deductibles should be increased
A deductible is the amount that the insurance company subtracts from your payout in the event you file a claim. Your insurance company may offer you multiple options regarding your deductible amount when you buy car insurance. It might be worth looking at higher deductibles to reduce your premium. Your premium will be lower if you have a higher out-of pocket cost. Before you decide on a higher amount, make sure you are able to afford your deductible in case of an accident.
Insurers use a credit score to price premiums. This is except for states that prohibit credit from being used to calculate rates. In most states, auto insurance is cheaper for those with good credit.
Improve your credit score if your credit is in need of some improvement. Although significant credit improvements can be slow, you can make a difference by paying off your debts and setting up a budget to track bills. Also, making timely payments can help reduce your insurance costs.
How to find cheap car insurance
Comparing car insurance is a great way to find the best and cheapest car insurance. You may be able to save money if you include additional steps in your process, even though premiums can vary depending on where you live, what zip code, and other factors.
Car insurance quotes can be obtained regardless of whether you have an existing policy or are looking to purchase a new one. Online shopping is a quick and easy way to compare your options. It is important to be aware of your financial goals and know the costs associated with each insurance company so that you can compare different quotes for the same amount.
If the average full coverage policy costs $1,674, you might see rate variations up to hundreds of thousands of dollars among multiple companies. You may find one insurance company offers lower rates if you add roadside assistance, which can cost an additional $20 per calendar year. The differences between providers are likely to be greater if you have additional coverages. Therefore, it is important to make accurate comparisons.
You may find it worthwhile to review which coverages you are most interested in, especially if you are on a limited budget. You might not need rental reimbursement or roadside assistance, but you may find that they are essential. You might be able pinpoint areas where a standard policy would suffice by reviewing the coverages you are interested in before getting quotes.
Numerous insurers offer tools that allow you to compare insurance quotes. Many companies offer comparisons of quotes with major rivals side-by-side. You may want to verify the quotes yourself.
You might also consider local carriers in your search. While larger insurers may be household names, smaller companies might offer lower rates or tailor coverage to meet local needs. You might also want to check the financial stability and customer satisfaction of the company. These two factors make up a significant part of your insurance experience. You may find that choosing a financially sound company will ultimately save you money and ensure a timely payout. J.D. is an industry-respected agency. Power and AM Best could be great places for you to begin your research.
You can also benefit from taking into account your driving habits and driving record to help you find a car insurance company that is affordable and lowers your car insurance rates. Every provider is unique and some offer insurance only for certain groups of motorists. The General offers high risk auto insurance. USAA, for example, provides coverage to military personnel and veterans. Many insurers offer pay per-mile auto insurance policies that are usage-based. You may be able to find companies that offer the best savings for your driving habits if you drive less than 12,000 m per year and use safe driving techniques.
Questions frequently asked
Which is the best car insurance for cheap?
Every driver is unique, and each driver has their own driving records, age, location, and other personal factors. These factors will impact the underwriting process and final rate. The best affordable car insurance provider will differ for each driver. Consider which providers have the lowest rates in your area, and what discounts are available with that policy.
Are there cheap car insurance options for high-risk drivers
Insurers consider many factors when determining your rate. Because of a higher risk level, drivers with poor driving records will be quoted more than those with clean driving records. There are still affordable car insurance companies that will cover you if your driving record is poor. Many top providers offer discounts high risk drivers, including auto-pay and bundling.