Cheap Auto Insurance Rates: How To Save
In some circumstances, whether you can get cheap insurance is out of your control. Men tend to pay more than women. Middle-aged drivers tend to pay less than teenagers. But no matter what, there are things you can do to keep your prices as low as possible.
Here’s what you can do to keep insurance affordable in the long term:
- Keep a clean driving history. People who cause crashes and get tickets tend to pay more for coverage.
- Buy a car with reasonable insurance costs. Certain cars are cheaper to insure. Before you buy your next car, get some quotes to see how it’ll affect your premiums.
- Pay your bills on time. Insurers don’t like to see a history of policy cancellations for not paying your premiums. Keeping up on your payments now will help you get lower prices in the future. Also, maintaining good credit can help you keep prices low.
If you’re shopping for a new policy and want immediate savings, here’s what you should do:
- Compare quotes from multiple companies.
- Get all the discounts you can.
- Make smart coverage decisions.
Compare quotes from multiple companies
One of the biggest pricing factors is which company you buy from. All companies ask for the same basic information when you apply. But they use that information in different ways. As a result, you could pay hundreds less if you find the right company.
“Prices vary dramatically from company to company, so it pays to shop around,” according to the Insurance Information Institute.
Even if you have tickets and accidents on your record, you can find a company that will give you a lower rate. In the end, you need to find the insurer that’s the best financial fit for you. You can’t assume the first insurer you get a quote from is the cheapest.
AutoInsurance.com is built to help you compare quotes and find the best price. When you fill out your information, you’ll get real quotes from a handful of major insurance companies. You’ll see which is the best option for you and can buy online.
Get all the discounts you can
Some discounts are automatic. You don’t have to do anything, and your insurer will still apply them. But for other discounts, you need to let your insurer know that you qualify.
The following discounts usually kick in automatically if you qualify. But you can still check with your insurer to make sure you’re getting the savings you deserve.
- Good driver
- Low mileage
To get the following discounts, you may need to let your insurer know that you qualify.
- Good student
- Defensive driving course
- Association membership (e.g.: AARP, alumni associations)
- College student away from home
Not all insurers offer all of the discounts mentioned here. But it’s worth it to ask about them.
Usage-based insurance discounts
Usage-based discounts are growing in popularity and availability.
In these programs, you install a device in your car that tracks how often it’s driven. Some programs also track events like braking and turns. After the insurer tracks your driving for a couple months, they look at the data. If they see you drive safer or less frequently than most drivers, you could get a discount.
Many companies offering these discounts advertise savings of up to 30%. Also, some give you a smaller discount just for enrolling.
The following table lists the major companies that have usage-based discount programs available in many parts of the country.
|Company||Usage-based discount program|
|National General||Low-mileage discount|
Make smart coverage decisions
Another way to keep premiums affordable is to make smart coverage decisions. This means making sure you don’t include coverage you don’t want or need.
Should you include comprehensive and collision coverage?
One of the biggest decisions you’ll make is whether to add comprehensive and collision coverage. Both are optional, and many people choose to buy them because they pay for repairing or replacing your own car. More than 70% of drivers add these coverages to their policy. Comprehensive and collision are valuable, but together they make up a large part of your premium.
You should first decide if this coverage is truly necessary. If you have an older car that’s not worth very much, it may not be smart to insure it for repair and replacement.
In the end, you need to decide if having your repairs covered is worth paying the premium. The Insurance Information Institute (III) offers this rule of thumb:
“If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective.”
If you decide to purchase comprehensive and collision, choose your deductibles wisely. The deductible is the amount of money that you must chip in before your insurance company will pay for your repairs.
If you choose a higher deductible, your premiums will probably be lower. How much lower? The III says the following:
“By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage costs by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.”
But keep in mind that if you get a higher deductible, you have to pay more to get a claim covered. You need to choose whatever is best for your financial situation.
How AutoInsurance.com helps you make smart coverage decisions
Your coverage decisions can have a big impact on how much you pay for your policy. Deductibles, optional coverages, liability limits: All of these things will affect your premium.
AutoInsurance.com helps you see the true cost of those coverage decisions. We do so by letting you experiment with your options. Once you have your quotes, you can add, drop, raise, or lower your deductibles and coverage selections. When you do, the quotes will be instantly updated to reflect those changes.
Insurers look at many variables when determining how cheap your auto insurance will be. Ultimately, the price an insurance company offers you will be determined by your risk profile — meaning your likelihood of having to file a claim during a policy period — and that insurer's business strategy.
When you use AutoInsurance.com's online quote form, we'll ask for your ZIP code and other pieces of information that will be necessary for insurers to get a better sense of your risk profile. If your driving history and certain personal characteristics indicate that you're less likely to file a claim, you'll likely be considered to have a low risk profile. In most cases, drivers with low risk profiles will have an easier time finding cheaper insurance coverage. But some coverage providers actually target drivers that are riskier to insure and will offer them low cost coverage when compared with most insurers. Since pricing models are so varied from insurer to insurer, the only way to know you're getting the cheapest coverage available is to shop around.
According to the National Association of Insurance Commissioners1, drivers who are over 25, female, married, don't have accidents on their records, and don't live with younger drivers tend to have fewer accidents and, consequently, get more affordable rates. But even if drivers don't fit this profile, they can still get cheaper coverage by shopping around and maximizing any opportunities for discounts. Here are some tips for getting discounted rates:
- Coverage: Become knowledgeable about coverage. Certain coverage types may be unnecessary and costing you additional money. One example is having physical damage coverage on a vehicle with a very low value. According to the Insurance Information Institute, if a car is worth less than 10 times the premium of your optional physical damage coverages, it may not be cost effective to keep those protections. Another example is having coverage that overlaps with existing health insurance. Discuss with our agents the benefits of having uninsured motorist and medical coverage when a health policy is already in force.
- Vehicles: It may be a good idea to quote coverage before buying a vehicle. Some vehicles are more costly to insure if they fall into a higher risk category. Whether the price difference is due to expensive replacement costs or negative claims trends, getting quotes for a vehicle before purchasing it can help you avoid surprises. Adding multiple vehicles on the same policy may also make you eligible for multi-car discounts, which can significantly reduce rates. Additionally, your annual mileage may directly impact premiums, so anyone with a short commute to work or school should inquire about a low annual mileage discount.
- Drivers: Insurers give most discounts to drivers automatically, without the need to ask for them. Such discounts include the good-driver discount, which is issued for having a good driving record with a certain minimum driving experience. For young drivers, a good-student discount can help reduce costs, but you’ll have to bring it up with your insurer and prove you’re getting satisfactory grades. Some things that impact price simply cannot be controlled, such as age and sex; however, it's good to know why, for instance, a middle-aged female may be quoted a lower rate than a young male.
Did You Know?
Some states require insurance companies to give you a discount on your comprehensive premiums if you have an antitheft device installed in your car. If you have an antitheft device, make sure to tell your insurer.