Between rising inflation, supply chain issues, and a looming recession, cutting costs and watching your money is more important than ever before. Getting rid of streaming subscriptions and ordering less takeout is one thing, but one area where you definitely shouldn’t cut corners is your auto insurance. Cancellation isn’t a good idea, since it’s illegal to drive without it in most states, and things will go doubly bad for you if you get in an accident without any car insurance. So how can you make sure you’re getting the most out of your car insurance while still saving some money on premiums? Here are a few tried-and-true methods.
Make Sure Your Car Isn’t Over-Insured
It’s an unfortunate fact of life: after a certain point, your car is no longer worth the money you’re spending on insuring it. Cars drop in value steadily the longer they’re driven, and there will come a time when that full comprehensive coverage is a losing proposition, because even getting a full payout for the value of the car isn’t going to make up for all the money you paid in premiums. If you have an older car, consider dropping comprehensive and collision coverage, and just keep liability. It will cover you in case of an accident and cost a lot less in the meantime.
Don’t Duplicate Benefits
Sometimes it’s easy to forget how many services we’re paying for, especially if we have a lot of insured assets to think about (one or more homes, multiple vehicles, etc.) That’s why it’s a good idea to take stock of the services you’re paying for from time to time and make sure you’re not duplicating benefits. For example, if you have a roadside assistance plan with another provider (such as AAA), drop one of them to save money — you likely won’t need both. This is especially true if you happen to have more than one policy covering the same assets.
Capitalize on Discounts
A lot of motorists don’t know this, but the average insurance company has dozens of discounts available for meeting various criteria. You could get a discount for being a good student, bundling your home and auto insurance, keeping a good driving record, being a long-time customer, installing anti-theft devices, and even being in certain professions, such as police and healthcare workers. Contact your insurance provider and see what’s available — you might be surprised at what you qualify for.
Change to Usage-Based Insurance
If you are part of the work-from-home revolution or if you just don’t drive nearly as much as you used to, it might be worth looking into switching to usage-based insurance. If you’re a low-mileage driver, you can qualify for a pay-per-mile policy, and presto — cheap car insurance.
Take a Defensive Driving Course
There’s more than one benefit to taking a defensive driving course. For one thing, you’ll learn safer driving and gain some new skills when it comes to looking out for the “other guy.” Also, most insurers will apply a discount to your insurance rate if you have successfully completed a defensive driving course.
Inform Your Insurance Company of Major Life Changes
Insurance companies assess risk according to your lifestyle at the time you take out your policy. So it follows that if you change something significant in your life, it might be worth notifying your insurer. Getting married (or divorced), buying a home, changing professions — all of these can shift you into a different risk category, and in a lot of cases, will result in your premiums going down.
Comparison Shop for Car Insurance
People like to stick with the same insurance company they’ve had for a long time, but that’s not always the wisest course of action, financially speaking. It’s worth taking some time to compare car insurance quotes at least once a year. For example, if you’ve had a traffic accident or violation, you don’t necessarily have to settle for a huge rate hike.
However, there are insurance companies that have more forgiving policies when it comes to traffic violations. According to numbers from Ross Martin at The Zebra, the national average for average car insurance is $1,529. Getting into an at-fault accident can raise that rate by $846 or more, bringing it to $2,375. But that number can easily change depending on your state and what insurance company you choose. For instance, in many cases, post-accident rates with Travellers and USAA can come in under $2,000. Similarly, having Allstate for your auto insurance can be considerably more expensive after an accident — around $3,482.
Auto insurance is just a fact of life if you drive a car — but that doesn’t mean you have to pay top dollar for good coverage. Compare some auto insurance quotes and see if you can find a better deal.
