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Ten Most Effective Car Insurance Savings Strategies
Every driver needs car insurance. It can help protect you from the high price of repairing your car after an accident and the potentially catastrophic costs of injuring someone. Plus, it’s required by law. However, nobody likes paying for it. And most people pay a lot. A recent survey by U.S. News and World Report found that the average annual cost for car insurance for drivers with medium coverage is a whopping $1,416! Auto insurance companies don’t make it easy to figure out how to save - after all, your high premium is often their large profit. Fortunately, we sought out expert advice for simple strategies that can help you keep more money in your pocket:
1. Regularly shop around.You’ll often find your biggest savings by switching to a new insurance carrier, so it pays to shop around every six months! You can compare car insurance rates from multiple top carriers by entering your Zip Code at the top of this page.
2. Adjust your deductibles.The deductible is the portion of costs that you are responsible for before your insurance coverage kicks in. Low deductibles can seem attractive because you will owe little or nothing if you have an accident, but the rates for low deductibles can be quite high. Explore increasing your deductibles and you may find that you’ll have significant savings in the long run.
3. Review your coverage levels.In some cases, you may be paying for more coverage than you are ever likely to need. For example, if you have modest personal assets, maximum liability coverage may not be worth the cost to you.
4. Avoid redundant coverage.Roadside assistance and towing coverage are valuable benefits to have if your car ever breaks down, but you may already be covered for these services through your credit card, car manufacturer or AAA membership. Personal Injury Protection and medical coverage often only kick in after your health insurance has paid out, so if you have quality health insurance it’s unlikely you’d need these benefits (though these coverages are required by law in some states).
5. Decline the extras.All of those policy add-ons are where the costs can really start to add up. Rental car reimbursement would be convenient if your car was in the shop getting repairs for an extended period, but if you could find other ways to get around without your car you’ll save on premiums.
6. Update your primary usage and average mileage.If your driving habits have changed, be sure to update your car insurance policy. For example, if you’re no longer commuting to work every day and driving less, change your primary usage from ‘commuting’ to ‘pleasure’ and reduce your average annual mileage estimate for instant savings!
7. Consider pay-per-mile car insurance.If you are a low mileage driver, pay-per-mile insurance can be a great way to access substantial savings. You’ll pay a low monthly base rate plus just a few cents per mile, which is tracked via a device in your vehicle or on an app on your phone. This is a rapidly growing new insurance product offered in some states by Liberty Mutual, Allstate, State Farm, Root, Metromile, and other car insurance carriers.
8. Bundle and save.Insurance companies love to get more of your business, so they’ll offer you a discount to bundle your home or renters insurance along with your auto policy. If you have multiple vehicles, you may find big savings by putting them on the same policy.
9. Accidents, tickets and DUIs don’t last forever.Negative marks on your driving work can be extremely costly, but fortunately they do eventually expire. It varies by state and carrier, but many accidents and tickets will fall off your driving record after three years, while a DUI may no longer count against you after five years. Learn what the limits are in your state and put a reminder on your calendar to check your rates as soon as your record clears up!
10. Ask for a discount.If you’re happy with your current car insurance, it may still be worthwhile to call to ask for an additional discount. Many insurers have retention or loyalty discounts, but they generally won’t offer them to you unless you ask for them.