Even before Brian and I received our policy renewal, we predicted that we’d be facing an increase in our car insurance premium. Everything else seems to be getting more expensive, so why not insurance? According to the U.S. Bureau of Labor Statistics’ consumer price index, car insurance rates have increased 17.1% over the last year thanks to supply shortages, severe weather events, and inflation. How annoyingly predictable…
In addition to high inflation, we figured our insurance would go up due to the risk of accidents and theft claims in our area. It’s just the reality of where we live and how people operate. As unfair as it is, car insurance rates can increase based on the zip code of the insured, despite having a clean driving record. It’s a frustrating situation for responsible drivers and their wallets.
Car Insurance Savings
Much to our surprise, our new car insurance premium wasn’t as high as some of our neighbors. According to their Nextdoor tangents, they were facing hundreds of dollars in increased premiums. Brian and I received a bill that was approximately $100 more than our last. Nonetheless, I went to work on finding ways to lower it.
In the end, Brian and I saved more than 30% on our car insurance.
If you’re up for a renewal and find yourself dealing with sticker shock, then check out some of our tips below on how to save on your car insurance premium.
Check for Discounts
The first move to make is to reach out to your current insurance company to ensure that all applicable discounts have been applied to your policy. You may qualify for the following discounts:
- Defensive driving course completion
- Affiliation with certain alumni associations or professional organizations
- Occupational discounts for military, law enforcement, educators, and more
- Safe driving record (accident- and ticket-free)
- Multi-car and/or multi-policy
- Vehicle safety features and/or anti-theft devices
- Long-time customer
- …and more!
Check with your insurance company to see if they offer any discounts to help you save more money.
Look into Employee Benefits
Your employer might offer deeply discounted insurance rates through partnerships with specific insurance companies. Double-check your benefits package or speak with HR to see if this perk is available to you.
Bump Up Your Deductible
The higher the deductible, the lower the premium. If you have the financial ability, opting for a higher deductible is one proven method to effectively decrease your car insurance premium.
Improve Your Credit Score
Many insurers use your credit score to determine how risky you are to insure. Improving your credit score increases your chances of securing lower insurance premiums, among other advantages. To learn more about building and improving credit, check out our Guide to Understanding Your Credit Score.
Consider the Type of Vehicle You Intend to Insure
If you don’t want to deal with the price tag of high insurance, then reconsider driving a “high-risk” car. A sports car or luxury vehicle with a higher chance of theft or expensive repairs would certainly be more of a risk to insure than a safe and reliable 4-door sedan.
Allow Monitoring of Your Driving
Most insurance companies now offer tracking systems in the form of plug-in devices or mobile apps that monitor how you drive. Insurers would have the ability to track speed, sudden acceleration, rapid lane changes, hard braking, locations, and more. These tracking devices are intended to encourage safer driving. If you’re willing to forgo some of your privacy, then signing up for a tracking program is one way you could lower your car insurance.
Pay in Full
Breaking up your payments into monthly installments usually costs you more. Check with your insurer to see if you can save money by paying your premium in full. Brian and I save on monthly payment service fees by opting to pay the full amount at once.
Avoid Filing Unnecessary Claims
You are not required to file a claim for damages just because you have the option to. Carefully assess if and when you’d like to file a claim. Filing a claim signals to your insurer that you’re a high-risk driver and, therefore, more likely to file additional claims in the future.
Oh, the importance of shopping around! After you have spoken with your current insurer and have gathered all pertinent information, take some time to explore what other insurance companies have to offer. And when I say take some time, I mean take some time!
It can take hours to sift through different insurance companies’ websites to get quotes, but the work could very well be worth it. Alternatively, don’t be afraid to pick up the phone and speak to some agents. Connecting with other insurance companies is a great way to learn about competitive rates, additional discounts, and different levels of customer service. If you would like to stay with your current insurer after comparing rates, then reach out to them to see if they’re willing to beat your other quotes.
We recommend shopping around for new insurance every 2 to 3 years for the best rates.
Don’t Overpay for Car Insurance
It can be easy to fall into a routine and simply pay the amount due year after year. Unfortunately, being too complacent can cost you hundreds in unnecessary spending. Remember to review your car insurance policy. Take note of any changes and/or increases to your rates. There are a number of ways to lower your car insurance premium, though the most reliable is often by shopping around for other rates. The savings you gain will add up and can be put toward other things in your budget.
Do you have any other tips on how to save on car insurance?
Happy saving and safe driving!