Nobody wants to overpay for gas, rent, and cellphone service. The same holds for car insurance. And just as you can search for deals on other purchases, you can hunt for ways to lower your car insurance costs.
Given that the average good driver in the United States pays $1500 a year for car insurance, reducing your insurance bill by just 5% to 10% can put more money in your pocket. Sometimes, you could slash your car insurance costs by 30% or more. Here are 10 tips to help you drive down your car insurance premium.
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1. Shop Around
Many of us shop around for bargains on electronics, clothes, and other everyday purchases. You can apply the same strategy to car insurance.
Whether you are getting insurance for the first time, renewing coverage, or switching to a different insurer, don’t overlook the savings you can score by comparing rates from several auto insurance companies.
Car insurance rates for the same coverage can vary significantly among insurance companies, so if you don’t shop around, you won’t know how much you can potentially save. The industry-backed Insurance Information Institute suggests obtaining quotes from at least three insurers to compare car insurance costs and coverage.
Be sure to compare identical policy coverage and limits so it’s an apples-to-apples price comparison.
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2. Review Your Deductibles
A car insurance deductible is taken from your insurance check when you file a comprehensive or collision insurance claim. You choose your deductible amount when you purchase a policy, and you can adjust your deductible later if you change your mind. A higher deductible means you pay a lower premium. That’s because you’re taking on more of the costs if you file a claim, and you’re less likely to make claims for minor damage because the repair costs won’t exceed your deductible amount by much.
3. Bundle Insurance Policies
TV commercials often promote the ability to bundle auto and home insurance. Most insurance companies offer discounts to policyholders who carry both auto and home policies, and bundling can apply to other coverage, such as motorcycle insurance.
Generally, a bundling discount (also known as a multi-policy discount) can reap savings of 5% to 25%.
Not only can you earn a discount from bundling, but also purchasing more than two policies from a single company “also simplifies your insurance, as you have it with one carrier,” Nelson points out.