How to Lower Your Car Insurance Premiums

Frustrated and unsure how to lower your auto insurance premiums? Knowing what influences car insurance premiums can help you make specific changes to take advantage of substantial discounts.

medium.com/@consumerliving gathered the following information about car insurance premiums and how you can effortlessly lower your premiums.

The rising cost of car insurance premiums can be caused by your vehicle’s value and driving habits (among other factors). Some things are completely out of your control, like rising costs to repair your vehicle, increasing medical expenses, and fraud. However, there are some things you can do to lower your car insurance premiums. Consider the following:

Sometimes, paying a higher deductible (the amount you must pay out of pocket before your insurance coverage activates) is a quick way to reduce your car insurance premiums.

Note: When increasing your deductible, you must be prepared to pay the deductible amount if you get into an accident. Ensure you have enough savings to cover your deductibles before making this alteration.

You may be thinking, “How does my credit score influence my car insurance?” In several states, a credit check is part of your risk assessment. People with higher credit scores typically secure lower insurance premiums because it correlates to making more responsible driving decisions.

Bundling insurance products is an attractive marketing technique used by insurance companies. Insurers will offer discounts for “bundling” or purchasing multiple insurance types from the same company, like homeowners, auto, boat, motorcycle, and life insurance.

Note: Bundling insurance policies keeps them with one provider, making communications and payments more convenient and less complicated.

Defensive Driving (Driver Improvement) is typically a 6-hour online or in-person course designed to teach drivers about safe driving attitudes and behaviors. In defensive driving classes, students learn to improve driving skills by reducing driving risks by anticipating situations and making safe, well-informed decisions.

Note: This discount (when offered) is typically valid for 3 years and often appears as a “3-year safe driver” or “Defensive Driver” discount on your car insurance policy.

A good driver discount (an insurance discount) is typically available to drivers with no at-fault accidents and no moving traffic violations during a particular period (often 5 years). Most insurance companies give consumers with clear driving records a 20 to 25% good driver discount.

Note: This discount often appears as a “5-year good driving” discount on your insurance policy.

You can get a safety features discount on your car insurance by having a vehicle equipped with safety features like:

Insurance companies offer you slightly lower rates for having a vehicle with technology that can reduce (or help you avoid) the chances of being in an accident (or the damage and injuries from an accident).

Insurance companies want to know how many miles you will drive because it helps them determine how significant of a risk you pose as a driver. The more miles you drive, the more likely you will get into an accident. Conversely, the fewer miles you drive, the less likely you will be involved in a crash.

Note: If you have recently begun working from home, have moved to a closer (reduced mileage), more convenient (public transportation), or started carpooling with coworkers, this reduction in your vehicle’s mileage should be immediately communicated to your auto insurance carrier, it may result in a significantly lower car insurance premium.

Tip: If you occasionally drive someone else’s vehicle, you may not need car insurance. If you often drive a car owned by someone in your family, you should have them add you to their auto insurance policy.

When quoting insurance policies, ask them what discounts they offer. There may be some discounts you didn’t know about. Consider the following potential discounts:

Some insurance carriers may offer discounts for parking in a garage (especially if you live in a high-theft area).

Comprehensive coverage reimburses for loss due to theft or damage caused by something other than a vehicle. This insurance is usually sold with a $100 to $300 deductible (policyholders may choose a higher deductible to lower their premium). States do not require collision or comprehensive coverage, but lenders may insist borrowers carry it until their car loan is paid off.

Note: Comprehensive insurance typically reimburses policyholders if a windshield is cracked or shattered. Some companies offer separate glass coverage with or without a deductible.

Car insurance providers use your state and ZIP code to calculate your premiums. People residing in big cities will often pay more for car insurance than those in rural areas or suburbs. This is because the increased traffic volume creates a greater likelihood of an accident. More accidents translate to more claims, repairs, and medical costs. Also, more traffic volume puts you at risk of encountering uninsured or underinsured drivers.

Yes. With the exception of Virginia and New Hampshire, all states require car insurance to register and drive a car. Driving without minimum coverage is illegal if you live in a state requiring auto insurance.

In the event of an accident, your car insurance coverage can help cover personal expenses, rental vehicle costs, medical expenses, and vehicle repair.

Note: In New Hampshire, drivers must prove their ability to pay for damages following a car accident. Virginia allows residents to pay an “uninsured motorist fee” of approximately $500 per year.

Tip: Your state may require different coverage levels than other states for property damage liability and bodily injury liability. While many drivers may choose inexpensive car insurance (only covering state minimum insurance limits), this choice may leave a driver paying for repair or medical expenses out of pocket in case of an accident.

You may be surprised to learn that the federal government does not regulate insurance companies. In fact, auto insurance is regulated and governed on a state-by-state basis, mainly because the US Constitution makes federal regulation difficult.

Note: Each state has its regulation system for auto insurance companies. These state regulating bodies issue operational licenses and examine an Auto insurance company’s coverage, policies, and financial health.

In this article, you discovered several practical ways to significantly lower your car insurance premiums without reducing your coverage.

Understanding what factors influence how your car insurance premiums are calculated will guide you when quoting, buying, or renewing your car insurance.

You need to know what reduces your car insurance premiums to avoid unwittingly overpaying for required vehicle insurance coverage.

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