If you’ve seen a spike in what you’re paying for car insurance, well, you’re not alone. A study from the Bureau of Labour showed that auto insurance rates went up 50 percent between 2006 and 2016.
But are you paying too much for car insurance? That’s a different question, but the answer could still be yes.
Before getting into how to figure this out, there’s something to keep in mind. When figuring out whether you’re paying too much don’t judge your rate against average rates you see online.
There’s just too many individual factors that go into your rate for an ‘average’ rate to be meaningful. The real thing you need to find out is whether, given your personal situation, you could be paying a lower rate.
Here are some questions to help you figure it out.
1. When did you last switch insurance companies?
If you think your car insurance company will reward you for loyalty, think again. Switching at least every two to three years is an effective way to ensure that you’re not paying more than you need to.
If you’ve never switched insurers, don’t worry you’re not alone. The average driver hasn’t changed auto insurance companies in 12 years.
If you’re already thinking switching insurance companies will be time-consuming and difficult, we’ve got good news for you. It’s a straightforward process that will save you money.
Prices will vary from company to company so shopping around is key to getting a better rate. This means getting quotes from multiple auto insurance companies.
To make things even easier you can download the Cover app and we’ll search over 30 different providers to find you the best rate.
2. Are you paying for coverages you don’t need?
No one’s expecting you to be an expert on every last type of insurance coverage. But a better understanding of how things work will help you avoid paying for insurance you don’t necessarily need.
For instance, as your car gets older its value falls. This significantly shrinks the size of the payout you would get from your insurance company on a collision or comprehensive insurance claim.
If your car is coming up on ten years old, it’s time to think about a liability-only policy, rather than paying for full coverage.
Similarly instead of buying gap insurance to cover an outstanding vehicle loan, find out if simply adding a new car replacement option to your policy could end up offering you similar (or even better) coverage but at a lower cost.
3. What’s your relationship status?
If you got married recently, you’re in luck. Being married can potentially save you money on your premiums.
Insurance companies tend to view married couples as safer drivers who will have fewer accidents and therefore fewer claims. (The stats aren’t the strongest, but that’s another story).
If you haven’t done so already, you and your partner can also save money by combining policies or bundling certain kinds of insurance together.
4. Are you taking advantage of the discounts you’re eligible for?
Besides tying the knot, there are other discounts out there you could be eligible for. It’s always worth asking your insurance agent about it.
If you’re someone who drives less than the average number of miles per year, you could benefit from the low mileage discount. This discount also applies to drivers who carpool to work.
Some insurance companies also offer discounts for drivers with a clean driving record. Depending on the insurer, they offer lower rates to policyholders based on if you’ve been accident-free for a certain number of years.
Discounts can range from customer loyalty, driving history, demographic, driving training, and equipment. So don’t be afraid to ask about any of them to your current insurer or to other companies while you’re shopping around for rates.
5. Have you changed jobs recently?
There are some insurance companies that will give you a lower rate for drivers who get insurance through their employers.
Not only that, you might get a discount based on if you’re part of any alumni or professional groups. Just remember that it never hurts to ask your agent about discounts.
If changing jobs also means you’re now driving significantly less, this might be another way your rate could come down.
6. Is your insurance bundled with one company?
More often than not, insurers will give you a discount if you purchase two or more types of insurance together.
But don’t just stop shopping around if you come across this discount from a company. There’s still a possibility that buying policies from different insurers could save you more money
Finding the best rate for you
If you think you are paying too much for car insurance, you can switch insurance companies at any time, so you should still look into other companies for rates even if you are mid policy.
Each insurer weighs the things that determine your rate differently, so it’s in your best interest to shop around. Even if you are set to stay with your current insurance company, you should call your agent because they can help determine all the discounts you’re eligible for.
Looking for a better rate doesn’t have to be a time-consuming experience. The Cover app can get you a quote within minutes.