How Can You Lower Your Car Insurance Premiums?
Car insurance is a legal and practical requirement if you drive a vehicle regularly in the United States. But for many consumers, this is an excessive expense. Each month, your car insurance is like another bill, adding up to siphon away your hard-earned income.
However, there’s good news. There are many strategies you can use to lower your car insurance premiums – often drastically and permanently.
This is the most important strategy to lower your car insurance premiums, but it’s one of the most neglected. Oftentimes, consumers get a quote from one or two sources, then sign up for whatever policy they find. But it’s much better to get a car insurance quote from many different sources.
Even if all your personal risk factors are the same (such as your driving record, number of miles driven, etc.), two different insurance companies may be able to offer you two very different prices. The only way to tell if you’re getting the best deal is to evaluate an offer in the context of many other offers.
There’s one caveat here, however; make sure you’re comparing these quotes apples-to-apples. Car insurance policies take many forms and offer varying levels of protection. You may be able to find a cheaper quote, but if that means sacrificing an important protective element of your policy, it may not be worth it.
Change Your Policy
If you’re looking to cut your monthly expenses, you may be able to tinker with your policy to get your premiums down.
- Change your deductibles. An insurance deductible is the amount of money you’ll be responsible for paying if you make a claim, before the insurance policy begins to pay out. For example, let’s say an accident dealt $20,000 of damage to the vehicles involved and your deductible is $500. You would be responsible for paying $500 before your policy kicked in to cover the rest. Generally speaking, the lower your deductible is, the higher your premiums will be, so raising your deductibles can lower your premiums.
- Change your limits. You can also change the limits of your policy. For example, your policy may protect you for up to $300,000 of liability coverage. As you might suspect, the higher your limits are, the higher your deductible will be.
- Adjust your breadth of coverage. Some auto insurance policies offer different kinds of protection. In addition to basic forms of damage, liability, and bodily injury protection, you may opt for extra coverage with regard to theft or vandalism. You can often adjust your coverage to get your premiums lower.
If you decide to change your policy, make sure you still meet your state’s minimum car insurance requirements. Your insurance provider will be able to help you do this.
Move Somewhere Safer
One factor that affects your car insurance rates is your zip code. In areas with high crime rates and/or high rates of traffic accidents, car insurance premiums tend to rise. In areas with lower crime rates and fewer collisions, your premiums will be lower. You can often save money by moving to a safer neighborhood – though it may not be worth the cost of moving if this is your only goal in doing so.
When insurance companies calculate risk, they evaluate how often you drive. Anytime you’re on the road, there’s a non-negligible chance you’ll be involved in an accident. Spending more time on the road necessarily increases this risk. So if you want to lower your premiums, one option is to start driving less.
There are many ways to accomplish this. For example, you could move closer to work so you drive fewer miles every day. You could start taking public transportation, avoiding driving a personal vehicle altogether. Or you could ride your bike for local errands.
Improve Your Driving Record
Finally, you can get better insurance premiums if you have a cleaner driving record. Any high-risk violations, such as speeding tickets, will probably increase your insurance premiums, since you’ll be seen as more likely to be involved in an accident.
Drive safe and keep your record free of violations, and you’ll enjoy much lower insurance costs. Unfortunately, if you already have a violation on your record, the only solution here is time; you need to wait, often years, for these violations to no longer affect your insurance premiums.
Insurance is a necessity, but it doesn’t have to be expensive. With the right strategies in place, you can likely drive your insurance premiums down – and possibly find a better insurance provider in the process. Be sure to keep driving safe, and review your other car insurance options periodically to see if anyone can offer you a better deal.