Car insurance rates have spiked, growing by 19% this past year. In the U.S., drivers typically pay $2,014 annually for their insurance. On average, this is about 3% of their yearly income. Due to high inflation, finding ways to trim down these costs is key. We’ll look at 12 smart moves to lower your insurance bill each year.
Key Takeaways
- Car insurance rates have increased 19% in the past year, the highest annual jump since 1976.
- The average U.S. driver spends $2,014 per year on car insurance, or 3% of their income.
- Bundling, increasing deductibles, and using telematics devices can lead to significant savings.
- Maintaining a good driving record and taking advantage of discounts are crucial to reducing premiums.
- Reviewing coverage and shopping around annually are effective ways to find the best rates.
Also Read: Houston Car Accident Attorney | Expert Legal Help
Comparison Shop for the Best Rates
Finding the best car insurance rates means you should compare prices. The cost of insurance can change a lot from company to company. Each one uses its way to decide prices, based on many factors.
Get Quotes from at Least Three Insurers
It’s smart to look at prices from three car insurance companies. This way, you’ll see who really offers the best deal for what you need and how you drive.
Consider the Company’s Reputation and Customer Satisfaction Ratings
Price is big, but it’s not everything when picking car insurance. You should check how the company does with customers and its general reputation too. Read reviews and check the company’s financial health to choose one you can trust.
By comparing prices and looking into the companies, you can find good insurance. You’ll pick something that’s well-priced and backed by a strong, reliable company.
“When comparison shopping for car insurance, don’t just look at the premium price – also consider the insurer’s financial strength, customer satisfaction ratings, and available discounts to find the best overall value.”
Also Read: How to settle a car accident claim without an attorney
Adjust Your Deductibles
Want to pay less for your car insurance? One smart way is to adjust your deductibles. A higher deductible equals lower premiums. This means you pay more out of pocket if there’s an accident.
By bumping up your deductible from $250 to $500, you might save 15 to 30% yearly. If you can go up to $1,000, you could even shave off 40% or more from your costs.
But remember, you should be able to cover the higher deductible if you make a claim. While it can lower your payments, it’s important to think about whether you can manage the extra cost after an accident.
Higher Deductibles Mean Lower Premiums
The math is simple: higher deductibles often lead to lower premiums. You could save a lot by taking more financial responsibility with a higher deductible.
Increase Your Deductible to Save up to 40%
It’s been shown that a $1,000 deductible can cut prices by up to 40%. This is a big saving that can really make a difference. Of course, it helps if you can afford that higher deductible.
“Raising your deductible from $250 to $500 on collision and comprehensive coverage could save you 15 to 30%, while increasing it to $1,000 can save you up to 40% or more.” – Insurance Information Institute
Taking your time to pick and tweak your deducible can lead to saving money. It’s all about finding that sweet spot – where your payment is low, but you’re still comfortable with the costs if something does happen. This approach is key in cutting your driving-costs overall. So, it’s worth looking into.
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12 ways to save money on car insurance
To save money on car insurance, you have many options. One way is to think about what coverage you need for older cars. If your car is worth just a few thousand dollars, you might not need to keep comprehensive and collision coverage. Think about it: the most the insurer will pay after an accident is what the car is worth. This might not be enough to cover the high premiums.
Looking into usage-based insurance can be a smart move too. These programs watch how you drive through an app or special gadget. For drivers who drive safely, the discounts can be big, up to half off. But, if you drive a lot or not so safely, it might not be the best choice. The extra monitoring and collection of your data might not be worth the savings.
Drop Certain Coverage on Older Cars
For older cars, use caution with the cost of certain insurances. It’s wise to compare what you pay in premiums to the car’s actual worth. Online tools like Edmunds.com or KBB.com can help you make this comparison. This way, you can decide if you’re spending wisely.
Consider Usage-Based Insurance Programs
Telematics and pay-as-you-drive insurance programs can be a real money-saver for careful drivers. These programs use an app or a device to check how safe you are on the road. Based on this data, they can slash your premiums by up to 50%. But, if you’re on the road a lot or drive in ways that are not so safe, you might not save much. The trade-off of saving money for being closely monitored and having your data collected might not be worth it for everyone.
Check out these options. You could end up saving a lot on your car insurance each year. Look closely at how you drive and what your car is worth. This will help you find the best way to save money on insurance.
Take Advantage of Discounts
Car insurance companies often give out discounts. These discounts can lower your costs by a lot. Let’s look at some common ones you can get.
Low-Mileage Discounts
If you don’t drive too much, you could save. Insurers give 5% to 20% off if you drive less than a set amount per year. Getting a 20% discount for driving less is possible.
Safety Feature Discounts
Having safety features in your car can earn you a break on insurance. This includes things like airbags and anti-lock brakes. It’s a way for insurers to give a thumbs up to being safe and reducing accidents. Adding these features can cut what you pay each month.
Bundling Discounts
Do you own your home or rent? Combining your car insurance with it might lower your bill. You could save 5% to 20% this way. Student away discounts save the most at 14%, followed by other bundling options.
Affinity Group Discounts
If you’re part of a big organization, it could help you save. Many insurers offer deals for members. This can lower your insurance costs even more. Members of these organizations might get special deals.
Exploring these discount options could really cut your insurance bills. This way, you can get good coverage at a lower price. It pays to check different quotes before you buy. This ensures you get the best savings for you.
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Conclusion
There are many ways to save on car insurance. Start by comparing rates from different providers. Try getting quotes from at least three places. This is the best way to find great deals. You should also look into getting discounts and keeping your driving record clean.
These tips can help you spend less on car insurance without losing good coverage. Always check your policy and see what discounts you may be missing. Stick to safe driving habits. And, be smart about which policies and features you choose. This will cut your insurance costs.
During the COVID-19 crisis, over 22 million Americans have lost their jobs. Now more than ever, it’s vital to find affordable yet effective insurance. Use the tips here to save big on auto insurance. This will help you face these tough times with some financial security.
FAQ
- How can I find the best car insurance rates?
It’s wise to compare quotes from at least three insurers to find good rates. But don’t choose based only on price. Look into the insurer’s reputation and customer reviews, too. Checking their A.M. Best financial rating is also key to finding the best deal.
- How can increasing my deductible help lower my car insurance costs?
Boosting your deductible can cut costs by a lot, potentially saving you hundreds. Your premium drops since you’ll pay more out-of-pocket if there’s an accident. For example, going from a $250 to a $500 deductible could save 15 to 30%. Bumping it to $1,000 might slash 40% or more off your costs. Remember, make sure you can pay the higher deductible if needed.
- When should I consider dropping certain coverage on my older car?
If your car is old and worth just a few thousand, consider dropping comprehensive and collision coverage. After an accident, the most you’ll get is the car’s value, not usually justifying the premiums. Use websites like Edmunds.com or KBB.com to see if it’s better to keep the coverage or save on premiums.
- How can usage-based insurance programs help me save on car insurance?
Apps or devices that track your driving can cut costs up to 50% for safe drivers. But, they might not be right if you drive a lot or not safely.
- What types of discounts can help me save on car insurance?
There are many discounts available to cut your premiums. If you drive very little, you might get 5-20% off. Safety features and technologies can also bring discounts. Bundling with other insurances can save you 5-20%. Other savings include group discounts from work or professional groups.
