8 Best Ways To Lower Your Auto Insurance Premiums
Lowering auto insurance premiums is one of the best ways to shave expenses from the family budget and pick up significant savings throughout the year.
What makes it such an excellent opportunity?
Savings are often directly in the hands of the driver. While circumstances can change based on risk classifications and different times in a person’s life, fortune favors the careful, responsible driver.
In that spirit, we’ve put together the eight most common ways auto insurance customers can lower their premiums.
1. Slow down and remember your training.
Most traffic accidents can be avoided by obeying traffic laws and being hyper-aware of your surroundings. In other words, it’s not enough to drive carefully. You also want to watch out for the other guy. Anticipating other drivers can help you avoid accidents altogether. Though an accident that is the fault of another driver may not raise your insurance premiums directly, it can cause additional expenses, such as medical and paying for damage caused by an uninsured driver. Also, by following traffic laws and going the speed limit, you’ll stay off law enforcement’s radar, and that will keep you in good standing with your insurance company. If you do get a ticket, take independent insurance agent Jarod Turner’s advice and “always ask the court to allow you to enroll in defensive driving, traffic school, etcetera.”
“If you have already taken a course,” Turner explains, “ask the court if deferred adjudication is an option. The options will typically vary by state, but allowing a ticket to go on your record is a premium killer and it typically remains on your driving record for five years, so never just pay a ticket and forget about it if you can avoid it.”
2. Chance a higher deductible, but be aware of the risks.
Accidents tend to ignore the careful driver, and when they do occur, they’re usually the fault of the other party. If you’re in tune with your own driving behaviors, then you can choose a higher deductible with confidence. As your deductible goes up, your monthly premium goes down. As such, most agents advising clients on how to lower their auto insurance premiums will recommend nothing lower than a $500 deductible. Particularly safe drivers may even wish to bump it to $1,000.
3. Think twice before filing that claim.
Say you have a fender bender in a parking lot that would result in a relatively cheap repair. Your deductible is $500. The repair is $600. You could file the claim, pay your $500, and let the insurance do its thing in picking up the rest; or, you could pay $100 more and keep the repair off your record entirely. You would have to pay the $500 anyway. Claims, however, could result in paying a lot more in premiums than what the extra $100 would cost. Use discretion before filing, and make sure it’s worth your while before moving ahead with the claim.
4. Be modest.
Genny Dill, an independent insurance agent and producer at Maury, Donnelly, & Parr Inc., advises individuals looking for lower premiums to be modest in their car selection. “High-cost and ‘sporty’ cars cost you more to insure,” she added.
Cost is generally a good benchmark to use for determining whether an automobile will be an insurance nightmare, but before you write off a make and model, consider talking directly to your agent. Most buyers have a wish list of autos when they enter the car-buying process. If you’re budget-minded, it’s worth having your agent run some numbers before you make a final offer.
5. Don’t go far.
A growing number of Americans are telecommuting or working four days per week in the office instead of the normal five to six. If you carpool to work and are able to manage working from home some as well, then you are a great candidate for low-mileage discounts. With companies like Safeco Insurance, you can save up to 20 percent off if you drive less than 8,000 miles per year. The threshold may differ depending on the company, but most offer this option.
6. Stack your coverage.
One of the most common (and beneficial) savings techniques on your auto insurance premium is to stack auto coverage with home, life, business, renters, and other forms of insurance. Captive carriers are able to save customers money every time.
7. Invest in an alarm system.
While the exact workings of an alarm system discount will depend on geography and the specifics of your insurance policy, it is probable that you can qualify for additional discounts by installing an alarm system in your car or truck. This presents a tangible deterrent against loss from theft, and many insurers encourage it. Make sure you bring it up if you’re not asked directly. Dill advises that some discounts may be “up to 25 percent” off.
Finally: Use an agent to your advantage.
While there are general principles that can guide you toward lower auto insurance premiums, more savings can often be found in the nuance of your policy and your coverage needs. No one knows how to guide you better than your insurance agent. Approach your agent with the above savings initiatives and ask an insurance professional if the company they represent offers any further savings opportunities suited to your situation.