You’re not imagining things — your premiums are going up, and it’s happening to everyone else too.
Auto insurance rates have been rising. Between 2006 and 2016, there was an estimated 50 percent increase.
Since cars are such a fundamental part of everyday life, it can be a hard pill to swallow when you see a spike in what you’re paying. Especially when you haven’t gotten into any accidents or filed any claims recently.
But you don’t have to stick to what you’re currently paying for auto insurance. What you pay for car insurance depends on a number of factors, such as your age, gender, where you live, and the car you drive.
There are definitely things you have no control over, but there are other factors you can easily change to cut down on the cost that are well worth the time and effort.
There are a mix of things that you can do today and over time that will lower your auto insurance premiums. Car insurance is mandatory, but you don’t need to pay more than you have to!
So here’s how to reduce your auto insurance bill:
1. Skip those monthly bill payments
What’s your payment plan like?
Insurance can get expensive, so it might seem like a good idea to pay month-to-month.
But it’s fairly common across insurance companies to give a discount on premiums when you pay annually or every six months instead of monthly.
Some insurers even offer a discount when you sign up for automatic withdrawal for paying your premium.
2. Use your increased deductible savings to save money
One of the easiest ways to shave off what you’re currently paying for a premium is to raise your deductible. The higher your deductible, the lower your premium.
But don’t be so quick to do this. Remember, you’re responsible for paying that deductible when filing a claim.
For example, let’s say you raise your deductible from $500 to $1000. If you get into an accident and file a claim for $2000, you’re on the hook to pay $1000 before your insurer pays you $1000.
The key to settling on the right number is to find out what works best for you. So find a number for the deductible that you can comfortably pay if you were to file a claim.
Once you settle on that number, squirrel away those savings into an emergency fund dedicated to paying for that deductible.
3. Bundling your insurance
More often than not, getting multiple policies through the same insurance company will save you some money. If you need renters or homeowners insurance, you should get it with the same company as your auto insurance.
While a home and auto insurance bundle is most common, you can bundle with life insurance, motorcycle, or boat insurance too.
You should also bundle your insurance with your partner. If your policy covers multiple vehicles, and more than one driver, you will receive a reduced rate.
Insurance companies favor married couples as they’re seen as safer drivers who don’t file as many claims. So your relationship status can benefit you!
4. Take advantage of discounts
You’re eligible for more discounts than you realize.
Here are just a few that you can inquire about the next time you talk to your insurance agent:
- Good driver discount: If you have a clean driving record or if you’ve been accident and violation-free for three to five years
- Good student discount: If you’re a full-time student and get good grades, you could shave 10 percent off your premium.
- Affiliation with a school, employer, or with the military
- Senior discount
- Paperless billing
- Anti-lock brake and anti-theft device discount
- EV or hybrid car
- Low-mileage discount
5. Reconsider the coverage on your car
Your insurance needs can change. While it’s always good to be protected, you never want to end up paying for coverage you don’t need. So reviewing your coverages is an easy way to lower your premium.
If you’re driving an older car, you can consider dropping full coverage and going with a liability only policy.
Instead of paying for full coverage, you can save that money and use it to repair or replace your car yourself.
Generally, if your car is 10 years or older, or if your car is worth less than 10 times the premium, full coverage is no longer cost effective.
6. Stay insured when possible
If you can, maintain continuous coverage.
Generally, insurers charge higher rates if you have a lapse in coverage in your insurance history.
7. Drive less
If you can, consider carpooling to work or taking public transportation more often.
Leaving the car at home means spending less time on the road driving. This lowers the chances you’ll be involved in an accident and insurance companies will see you as less of a risk.
This could bring your premiums down. And if the difference is significant enough, you could be eligible for the low mileage discount.
8. Drive safely and work on your driving history
If you have to drive often, then make sure you’re alert, present, and cautions at all times while at the wheel. You’re less likely to drive recklessly and get into an accident.
If you aren’t eligible for the good driver discount now, you could be if you continuously work on driving safely.
You can also work on your driving skills by taking a defensive driving class. Some insurers even offer a discount on the course itself. And some provide a discount after you’ve taken the class.
9. Be careful of how many claims you file
Whether you should file a claim or pay out of pocket completely depends on the situation.
But know that filing a claim will increase your premiums. And not every claim is equal.
You can file a relatively small one (usually a comprehensive claim) and it might not have a huge effect on your premium.
But filing several comprehensive claims or filing a collision claim will definitely push your premiums up significantly.
10. Before you buy a car, look into the insurance costs
Premiums are partly based on the car’s make and model, the cost to repair it, its overall safety record, and the likelihood of theft.
You can always take a look at vehicle ratings on the Insurance Institute for Highway Safety website.
You can also use Cover’s car insurance calculator to see how your vehicle affects your insurance rate. Select your car model and you’ll see a score out of five.
11. Work on your credit score
This isn’t a quick overnight solution, but actively working on improving your credit score will bring your premium down.
Drivers with a low credit score can end up paying more than double what drivers with a good credit score do.
Make sure you’re paying your bills on time. And request a credit report to correct any errors you see.
12. Shop around and then switch insurance companies
It’s pretty common to stay with the same insurance company for a long time. A survey from 2015 suggested that on average drivers stay with the same company for 12 years.
Insurance companies do give out loyalty discounts, but you shouldn’t assume that that will give you the best rate.
The best thing to do is get multiple quotes from different insurers to see what’s being offered out there.
And if you’ve been in an accident, this shouldn’t stop you from shopping around. Insurers all treat accidents and violations differently.
And even if the quotes aren’t significantly different, it could save you a couple bucks. And switching to another provider could be the answer to getting a lower premium.
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