Car insurance rates are going up, but that does not mean you have to go broke trying to stay covered. Fortunately, there are a number of smart ways to get more affordable car insurance and cut down your rates. Here is a look at practical ways to save money on your premiums while keeping your protection: bundling policies to improving your credit score.
Here is a guide to help you get cheap car insurance without compromising your coverage.
Understand What Coverage You Need
Before searching for cheap car insurance, you should determine exactly what kind of coverage works best in your particular situation. Too little insurance leaves you exposed when you need it most in the case of an accident, whereas too much insurance has you overpaying without necessarily getting full value.
Ask yourself some questions before signing up for auto insurance:
- Am I adequately covered?
- Am I paying for unnecessary options?
For example, you might not need comprehensive collision coverage on an older car that you have paid off. On the other hand, you might need additional coverage if you lease or finance your car.
Types of Common Car Insurance Coverage:
- Liability: Pays for damage to others or injury in an accident you cause.
- Collision: Pays to repair your car in the event of an accident.
- Comprehensive: Protects your car from theft, vandalism, or weather damage.
- Personal Injury Protection (PIP): Pays some medical bills after an accident.
- Full Coverage: Liability, collision, comprehensive, and sometimes extras like roadside assistance.
Shop Around for the Best Rates
Every insurance company calculates premiums differently. For this reason, it pays to shop quotes from multiple carriers.
Here is how to find the best rates:
- Use online comparison tools to get quick quotes.
- Ask for quotes from both big insurers (like Geico or Progressive) and smaller regional companies.
- Compare coverage levels to ensure you are getting similar policies.
- You will often find that rates for the same coverage can differ by hundreds of dollars between insurers.
Maximize Discounts and Incentives
Many insurance providers offer discounts to help lower your premium. Here are some of the most common ones:
- Bundling Discounts: Save by bundling your auto insurance with home or renters.
- Safe Driver Discounts: Maintain a clean driving record to earn rewards.
- Low-Mileage Discounts: If you drive less than average, ask for a reduced rate.
- Student Discounts: Good grades can translate to savings for young drivers.
- Military Discounts: Most insurers give active-duty service members a reduced rate.
- Paid-in-Full Discounts: Instead of paying monthly, pay upfront and save money.
Consider Adjusting Your Policy
If switching insurers seems like a nuisance, you can still save money with your current provider by tweaking your policy:
- Raise Your Deductibles: The higher your deductibles are, the more money you will pay out of pocket before insurance kicks in. Your premium will be lower. Just make sure you have savings to cover the deductible in case of an accident.
- Reassess Your Coverage: If you can afford potential repairs for older cars, consider switching to liability-only coverage.
- Ask About Additional Discounts: Call your insurer and inquire about discounts you might qualify for. Mention if you have found lower rates elsewhere—they might match them to keep your business.
Understand the Factors That Impact Your Rates
Some of the major factors that involve your person and the vehicle that contribute to determining your car insurance rates include:
- Type of Car: New or expensive cars are usually more expensive to insure since repairs are more costly.
- Driving History: A clean driving record means savings, while tickets and accidents increase your rates.
- Location: Domiciling in areas with a heavy flow of traffic or bad roads can increase your premium.
- Credit Score: Good credit can lower your rates in most states.
If you are planning to buy a new car, research the cost of insurance before you make your purchase.
Watch Out for Potential Pitfalls
Cheaper is not always better. Some low-cost insurance policies might have restrictions that could leave you underinsured. For example:
- Some plans may not cover permissive drivers (friends or family who borrow your car).
- Others will lower coverage if you drive out of your state.
- Always read the fine print and check reviews of any insurer you are considering.
Save by Switching Providers
While loyalty discounts exist, they are not always enough to outweigh rising premiums. Shopping around every 12 months can ensure you are getting the best deal.
According to a report by J.D. Power, nearly 31% of auto insurance customers in the United States saw a rate increase in the past year. If you are one of them, you could save hundreds of dollars per year with a different provider.
Conclusion
It does take some work to save on car insurance, but the results can be worth it. By knowing what you need in terms of coverage, comparing quotes, and maximizing your discounts, you can get the right policy at a price that works for you. Do not take high premiums lying down these tips to take control of your car insurance costs today!