What if a few simple changes could lower your car insurance premiums?
If you’re like most drivers, you’re curious about how to lower your payment. The good news is that premiums are determined by special factors. Once you understand these factors, you can reduce how much you pay for your auto insurance.
Wondering what these different factors are and how you can start saving? Keep reading to discover the secrets you’ve been looking for!
More expensive cars and luxury rides will mean higher premiums. A certain type of vehicle, such as convertible and sports, will also bring up your car insurance premium. Conversely, cheaper and simpler ones usually command lower rates.
Typically, older people pay less than younger people. Driving experience also plays a role — between two 25-year-olds, the one who’s had his license longer will pay a lower premium. As young drivers grow older, they are often surprised at how much their rates drop.
Where you keep your auto plays a role in your premium. If you live in an area with a lot of crime or crashes, you will pay a higher premium. If you and your vehicle move to a safer area, though, it helps lower your costs. To learn more about this, read and study your insurance policy in full.
A driving history with fewer traffic tickets and at-fault accidents results in a lower premium. For most minor traffic violations and wrecks, carriers typically look back three to five years. Serious violations such as DUIs and license suspensions stay on your record longer and dramatically affect the auto insurance rates that you get offered.
Many insurers provide savings to members of particular clubs and associations, such as AAA or AARP. Be sure to let your insurance agent know about any club memberships or other organization memberships that you may be a part of.
How much you drive has a bearing. If you have a long commute or like to take big road trips, providers will charge you a higher premium.
Keep in mind that intentionally misleading the insurance company — for example, providing an address that’s different from where you normally live and keep your auto — is fraud. If the insurance company finds out that you knowingly gave them incorrect information, they may drop your coverage. In the worst-case scenario, they may even refuse to process a claim if you’re involved in an wreck!
Tips on How to Lower Your Coverage Rate
Whether you’re shopping for new coverage or trying to trim costs with your existing insurer, there are plenty of ways to lower your premium and get a better price. For example, if you started working from home and your number of miles decreased, that could be worth some savings.
Most carriers will offer a lower premium if you complete an approved defensive driving course. Your state DMV will have a list of approved defensive driving course providers. It’s even possible to take a course online to fit your schedule!
Once you receive your certificate for completing the course, contact your insurer so it can apply your savings to your next renewal. In addition, completing the course may help give you the skills and preparation to eventually get a good driver discount (more on this later).
Many companies and organizations have arrangements that allow employees and organization members to receive instant discounts. Ask around. You’d be surprised how many employers, alumni associations, social clubs, and other organizations can get you a lowered price on your premium! This is good information whether you want the best rate price on a new car or just want to pay less.
If your driving record shows you haven’t had any at-fault accidents or moving violations, such as a speeding ticket or running a stop sign, in the last few years, then you’re likely to get a reduction for “good behavior.” Additionally, since getting into crashes and filing claims increases your cost, safe driving plays a significant role to get a better rate and finally get cheap car insurance. Establishing good driving habits young is the easiest way and the most important factor in commanding low rates.
If you’re not sure what’s on your driving record, you can find out by contacting your state DMV. You can also contact your carrier to learn about other savings you may qualify for (such as the good student discount in high school and college).
Some companies offer a decrease if you keep a good credit score. Some ways to improve your credit report include paying your bills, credit cards, and loans on time. Always remember to pay your premium, and be sure to monitor your credit history and focus on improving it from month to month!
Install Anti-Theft Device and Safety Features
Many insurers offer lower prices if your auto has an anti-theft device or safety features, like anti-lock brakes, installed. Many newer ones already come with an anti-theft system. If you have an older one, it might be worth it to look into installing an anti-theft device or some safety features, such as an alarm. Besides saving you cash, it’ll save you some of the stress and anxiety if your ride is stolen!
Combining your home and auto packages into one comprehensive plan could get you a bundling discount. If you buy home protection from the same carrier as other plans, such as watercraft or renters, your bundling discount could be as much as 25%.
Most companies charge more when they see you’ve had gaps in your coverage, even if it was because you didn’t own a vehicle. The longer you stay insured with no gaps, the lower your premium will be.
If you sell your wheels, it’s still possible to avoid a gap in coverage if you purchase a non-owner liability policy. This helps you avoid potentially expensive “gaps” in your coverage. Not only does this save you cash when you need full coverage again, but it also protects you if you’re involved in an accident while driving someone else’s. In that case, the non-owner liability policy covers damages above the owner’s limits.
Occasionally, an insurance agent offers special rates to customers switching. If you’re looking for how to lower your payment, this is one of the easier methods. Just don’t expect to get the same price reduction when you renew!
Most insurance companies offer breaks to customers who have multiple policies with them, especially auto or homeowners. In many cases, having a policy within the same household counts, so your spouse or partner’s package can still get you a discount.
For collision coverage and comprehensive, you usually have some flexibility in setting your terms. If you’re looking to save on your premium, then you should consider increasing the deductible. If your automobile is damaged, the deductible is the amount of money you agree to pay before your policy starts covering the costs. A higher deductible means that you’re covering a larger share of the costs in case of an accident or theft. That’s why the insurer is willing to charge a lower premium when you increase the deductible.
The downside in this instance is that if there is an accident or theft, you’ll be faced with a higher surprise bill. So always make sure the deductible is an amount you’re comfortable paying at a moment’s notice for repairs.
Another option for collision and comprehensive is to decrease the limit. The limit is the maximum amount the provider will pay if your ride is damaged. Since they are on the hook for less money, a lower limit means a lower premium.
If your vehicle’s value is well below the limit, then it makes a lot of sense to lower the limit. You might consider further lowering the limit if you’re comfortable doing that. The downside is that you’ll get less money from your carrier if your vehicle is damaged or stolen. Still, if you’re looking for how to lower your payment, this is a great option.
It’s usually cheaper to pay the entire premium in advance, annually or six months. If you can’t afford to do that, then opt for the payment plan with as few payments as you can manage — plans with more installments usually have more added fees.
In addition, many insurance companies will offer a small savings if you choose to pay online or sign up for automatic payments by credit card or from your bank account. If you do sign up for automatic payments, just don’t forget to set a future reminder to yourself to make sure that there’s enough money to cover the payment!
Even if you’re satisfied with your current premium, it’s always a good idea to shop around for new quotes on a regular basis. When your policy is up for renewal, double-check that you’re getting the best deal. Try to get at least two or three additional quotes just to make sure you’re making your decision based on enough information.
As you request and compare different car insurance quotes, it’s important to ask yourself a few questions. This is how to lower your payment with just a few clicks!
If you’ve been involved in any at-fault accidents or traffic violations recently, then you should share this so you can get the most accurate quote.
Remember that limits and deductibles affect the premium. That’s why you should make sure you’re comparing “apples to apples” and that all the limits and deductibles are the same. If they’re not, contact the insurance company and ask for a revised quote with the deductible and limit you’re looking for.
Just because the coverage is available doesn’t mean it makes sense to pay for it. Beyond the legally required minimum liability coverage, the purpose of insurance is to help pay for expenses that you couldn’t pay yourself in an emergency.
Now you know how to lower your payment, but do you know who can give you the affordable automobile insurance you’ve been looking for?
Here at Freeway, we know how annoying it is when your insurance premium keeps going up each year. To get a better deal, it only takes a few minutes to get a quick online quote or by speaking directly to an expert at (800) 777-5620. Making an in-person appointment at one of our convenient locations is another great option.