17 Ways to Lower an Auto Insurance Rate
Maybe you were renewing your policy and your carrier raised your car insurance rate. Maybe it’s the new law that bans gender discrimination in auto insurance rates that caused your insurance rate to rise. Or maybe you had an accident or moving violations that ended up costing you points on your driver’s license. Sometimes, changing addresses causes car insurance rates to rise too, and a longer commute will always raise your auto insurance premiums. Also, distracted driving has taken a toll on car insurance rates across the board over the past few years. Many factors are pushing rates over the roof, but that doesn’t mean that you can’t try to lower your auto insurance premiums today. There are several ways you can do this. We’ll show you how.
- Raise your deductible for a lower premium.
The deductible is the amount you have to pay first before your insurance company will pay a claim. Usually, the deductible amount is $500, $1,000 or more. Keep in mind that if you set your deductible high, you’ll be responsible for paying that much towards your claim. If you can afford it, this change will bring down your monthly payments (premium).
- Take a driver’s safety class.
If you have any points on your license causing your rates to go through the roof, you can lower your car insurance rate by taking a driver’s safety class. After you give proof to your insurance company that you’ve completed the requirements, you may see a significant decrease in your car insurance rate. There are online classes available too, which are usually far more convenient than classroom sessions. Also, for future reference, take a class immediately after being ticketed for speeding or a moving violation. If you give notice of having passed the class to the DMV right away, your insurance company will never know about your bad driving and your rates won’t go up.
- Shop car insurance rates.
There’s no reason to stay with your current insurer if you’re pretty sure the rate you’re paying is too high. You’ll want to shop for as many quotes as you can in order to see what your options are, but it’s time consuming considering the wait times and all the information you have to give to each insurance company. Instead, compare rates for free with SmartFinancial, which partners with dozens of carriers. Your information will not be sent to multiple agencies, either. You’ll simply be matched with the agent of your choice after you choose the plan that suits your needs and budget.
- Bundle your auto with your homeowners or renters insurance for a discount.
There’s no need to stay with the same homeowners insurance that you began with. Even if your payments are being made by the mortgage company, you can still switch carriers. In fact, one of the biggest mistakes people make is staying with the same home insurance carrier because they feel tied to the policy. Just because you are paying your mortgage loan and homeowners with one check does not mean that they are tied to one account. Just find a new carrier and contact your mortgage lender as soon as you start a new plan. Just make sure there are no lapses between the two policies. You never know when something may go awry in that gap.
- See if you qualify for a discount.
Chances are that you qualify for a discount and possibly more than one. Contact your agent if you think you are eligible for any of the following: Good Student, Mature Driver, Multi-policy, Multi-car, Bundling, Paid-in-full, Claim-free, Online Shopper, Defensive Driver, Driver Safety Course, Safe Driver, Early Renewal, Loyalty, Military, Low Mileage, Anti-lock Brakes, Anti-theft Devices, Green/Hybrid Car, Auto-pay, etc.
- Trade in your car for a less expensive one.
When you consider the fact that your insurance rate reflects the overall value of your car, it only makes sense that you pay more in car insurance with a more expensive car. If you’re in that sinking boat, you may want to trade your car in for a more affordable one. Your insurance will go down too. Note: some cars are cheaper than others to insure, for reasons that include likelihood of theft.
- Trade in your car for a safer one.
There are all sorts of perks for being a safe driver but having a sports car raises red flags. Having a safe car definitely helps keep your auto insurance rate low and qualifies you for a discount. For maximum savings, make sure you have anti-lock brakes and anti-theft devices. There are so many safety features in cars today that you barely have to make the effort to install anything. With that said, some safety devices (like backup cameras) are expensive, and while they qualify you for a discount, they raise your rates too because they are expensive to repair or replace if you have an accident.
- Reduce your car insurance coverage.
If you have an older car, you probably don’t need full coverage on it. You should do a quick analysis of how much you’re paying in comprehensive and collision versus what you’d get paid out if you totalled your car or needed extensive repairs. If you find you’re paying more per year, then consider dropping excess coverages.
- Fix your credit.
Some states, like California, do not use credit as a factor in determining auto insurance rates, but many states still do. If you pay your bills on time and don’t accrue any new debts, you’ll soon be paying less in insurance. Be patient, though, because it takes time for your good behavior to be reflected in your insurance rate.
- Find safer parking.
If you live in a neighborhood that’s considered higher risk, consider parking in a secure garage. You may actually be paying less overall. Crunch the numbers to see if this option helps you out.
- Get a higher degree.
People with higher degrees have lower car insurance rates. If you don’t have a college degree, get one. If you already have a bachelor’s degree, work towards a masters and so on. While car insurance is hardly a determining factor in getting a more advanced degree, it is one of the perks!
- Get married.
Married people are considered lower risk so they have lower car insurance rates. If you’re thinking about tying the knot, not only will you save money by consolidating bills, but your rates will most likely drop, too.
- Find a conservative job.
It’s true that your job or career is factored into your car insurance rate. It makes sense that if you’re stuntman, you auto insurance rate will be higher than a teacher’s, right? If you have a job that seems unsteady or poses dangers, your rate will be higher than if you worked for, well, an insurance agency.
- Pay your insurance in full.
You’re given the opportunity at renewal time to spread out your payments into monthly premium installments. Usually, there is a service fee associated with the convenience of breaking up the payments. If you can, pay for your car insurance in full and upfront. You will save some money this way if you can afford to do it.
- Drive more safely.
Your rate should drop or at the very least stay stable if you avoid accidents. If you follow all the rules of the road, you will not be pulled over and you won’t accrue points on your license.
- Drive less.
For people who drive about 5,000 miles or less, there’s usually a pretty substantial discount in car insurance so move closer to work! If you already drive very little, make sure to tell your agent, who will otherwise assume you’re driving the average amount, which is not eligible for a discount.
- Insure multiple cars/drivers.
If your credit is atrocious and you have a million points on your license, you can still lower your auto insurance rate. Try for a multi-car discount by putting all the cars in one residence under the same policy. The only criteria is that you must live at same residence or jointly own the vehicle.
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