Top 9 Tips on How to Lower Car Insurance Premiums
Found yourself exclaiming, “why is my car insurance so high?” You’re not alone: at least 5.6 million other drivers throughout the US are on the same boat. This is the number of motorists who’ve seen the most increase in their auto insurance rates this 2020.
In fact, car insurance expenditures have gone up since 2010. On average, spending on auto insurance policies has risen by almost $218 from 2009 to 2017. Back in 2009, consumers only shelled out $786.65, which then grew to $1,004.58 by 2017.
With that said, learning how to lower car insurance costs should be one of your top priorities this year. The sooner you can secure better rates, the more money you get to save in the long run.
Ready to find out the top answers to your question, “how can I get the lowest car insurance rates?” Then keep reading, as that’s exactly what you’ll learn in this post!
1. Raise Your Experience Level
Young drivers can be at least five up to 10 times more at risk of sustaining injuries due to collisions. However, researchers note that the risks go down within their first few months of driving. Their likelihood of getting involved in a crash also further drops within the next 18 to 24 months.
Other studies found that newly-licensed drivers are up to eight times more at risk of a fatal crash. This is particularly evident within the first six months of them driving alone. This likelihood, however, also goes down as they get more driving experience.
As you can see, one’s experience is a good indicator of a driver’s likelihood of getting into a collision. The less driving experience, the higher the risks of a crash.
This is also why younger drivers often tend to have the highest auto insurance premiums.
With that said, gaining more experience is one of the key steps on how to get cheaper car insurance.
One way to do this is with additional driving education, such as a defensive driving course. Many insurers offer automobile insurance discounts for completing such programs.
2. Show Insurers How Smart a Student You Are
Speaking of additional driving education, many insurers also offer another student-related discount. Known as the “good student discount,” it can help you lower your auto insurance costs by anywhere from 15% to even 35%.
Each insurer has a different definition for what they consider as a “good student,” though. For example, one may provide a 25% discount to college drivers who have at least a 3.0-grade average. Another may require a teen driver to have (and maintain) a grade average of B or higher.
All insurers offering such discounts will need to see proof of grades. A traditional report card is often the most common way to satisfy this requirement. For homeschooled students who don’t have this, SAT scores may suffice.
If you’re wondering how you can lower your car insurance with good grades, it’s due to an assumption. Insurers assume that a student who’s doing well in school is more likely to be responsible on the road too.
As a result, those who excel in their academics deserve to have lower insurance premiums. Being a responsible driver may, after all, be an indication that a person has a lower risk for filing a claim.
3. Maintain a Healthy Credit Score
Studies found that folks who do better in managing their finances have lower claim risks. Meaning, the higher their credit score is, the less likely that person may file for an insurance claim.
As such, drivers who have a clean credit history often enjoy lower auto insurance rates. A credit score, after all, is a good indicator of how well someone manages their finances.
Note that there are various types of credit scores, although the FICO score is the most popular. This is also the scoring system that many auto insurers refer to when deciding how much to charge. A good FICO score is at least 670, but the higher it is, the better, with 800 or above being an “exceptional” score.
With that said, be sure to get a free copy of your credit report before you even shop for a new car and insurance policy. This way, you can make sure that it doesn’t have any errors in it. If it does, have that mistake corrected first, especially if it shows a lower score.
Credit reporting errors are common in the US, affecting one in five consumers. Aside from hiking up your auto insurance rates, it can also spike up your car loan interest rates.
4. Always Compare Auto Insurance Quotes
Did you know that there are over 5,965 insurance companies in the US? Of these, more than four in 10 (2,507) are property/casualty (P/C) insurers. Auto insurance providers belong to the P/C insurance sector.
So, just imagine how time-consuming it would be to ask many of these insurers for quotes. On the flip side, knowing how many auto insurers you have to sift through may make you lax on your search. However, if you skip quote collection and comparison, you’re unlikely to find a great deal.
The great news is that a dependable insurance agency can carry out both tasks on your behalf. They can collect insurance quotes for you and help you compare each offer. That makes working with a reputable agency one of the best ways on how to get cheap car insurance.
5. Get All Your Insurance Needs From One Provider
Another excellent way on how to how to lower car insurance rates is by bundling this with other policies. With this method, you purchase several insurance products from a single provider. Many P/C insurers offer various coverage types other than auto insurance.
If you buy several coverages from one company, you’re likely to get a multiple policy discount.
Aside from saving money, this strategy may also help you save time since you’ll deal with only one insurer. You may also find it easier to stay on top of all your policies since you only need to contact one company. Moreover, once you have to carry out an annual review of all your plans, you only have to call one provider.
Many motorists in Massachusetts often bundle their auto insurance with their homeowners’ policy. However, you may also be able to bundle your car insurance policy with say, pet insurance. Feel free to ask an insurance agent about motorcycle, boat, and flood coverages too.
6. Apply for a Low Annual Mileage Discount
In Massachusetts, the average number of miles driven per day in 2017 was 24.8 miles. That translates to an annual average of 9,052 miles. If you drive much less than that, then you may be able to secure a low annual mileage discount.
Most auto insurers offer this money-saving deal for those who drive fewer than 8,000 miles a year. The idea is that the less distance traveled, the lower the risk of a driver getting into an accident. This reduced risk of getting involved in a crash may then translates to a lowered risk of filing a claim too.
In addition, a low annual mileage indicates that a person spends less time driving. The shorter the time spent on the road, the lower the risks of also getting into an accident. The length of driving time, after all, can also make one more prone to road collisions.
One example is an interstate trucker, who can legally drive non-stop for up to 11 hours every shift. However, being on the road for over eight hours has shown to raise a driver’s risk of getting into a crash by 1.8 times. That’s in comparison to a motorist who drives for two hours straight or less.
This is also why commercial truck insurance costs more than regular auto insurance.
Either way, if you don’t put a lot of miles in your car, be sure to check out the low mileage discount. The same goes if you’ve reduced your driving time from the previous years. This change in your driving behavior may already warrant auto insurance discounts.
7. Equip Your Ride With Extra Safety and Security Devices
According to the latest FBI report, there were 748,841 motor vehicle theft cases in the US in 2018. While that’s no doubt high, it does show a 3.1% decrease from the previous year. Still, these crimes led to a staggering average dollar loss of $8,407 per stolen vehicle.
While Massachusetts is among the top five safest states in the US, car thefts still occur here. That’s why it’s best to make your car a lot safer and more secure with anti-theft devices. In doing so, you can better deter car thieves who can leave you without your precious ride.
Best of all, such security technology can help qualify you for an insurance discount. Most auto insurers are more than willing to offer this to policyholders. That’s because anti-theft devices can help lower a driver’s risk for filing a stolen car claim.
8. Conduct an Annual Review of Your Car Insurance Policy
Many things could have changed with your car, driving habits, and your life within a year. All these changes could qualify you for a lower auto insurance rate.
For example, you may have recently installed anti-theft security devices in your car. You may have also taken extra driver’s ed courses a few months ago. It’s also possible that you have paid off a lot of your debts, resulting in a higher credit score.
As we’ve discussed above, all these instances are qualifiable for auto insurance discounts. However, you may forget about them, which can make you miss out on a lot of money-saving opportunities. That’s why it’s super important to schedule regular annual car insurance policy reviews.
If you work with an agent, you can worry less about this since they will check on you at least once a year.
9. Take Advantage of Insurance Agent Services
A reliable insurance agent will do much of the legwork when it comes to finding the best insurance for you. These professionals can help you obtain multiple quotes from preferred insurers in Massachusetts. This alone can already help you save a lot of time, as all that’s left for you to do is to compare the quotes.
More than that, an agent can help determine the level of essential coverages you need.
Granted, you may already know what the required minimum coverage in MA is. However, that doesn’t mean that your current policy only contains these requirements. It may have add-ons that you don’t really need, or it may lack coverages that you, on a personal level, do require.
Let’s say that your existing policy only has the minimum required coverage types. Let’s also say that your work requires you to often pass by unsafe roads, such as those with a high theft rate. If your vehicle gets stolen, your skeletal policy won’t help pay to replace your car.
That would be far more expensive than if you had comprehensive coverage on your policy. This is the type of coverage that helps to pay for a vehicle replacement in case it gets stolen.
An insurance agent can help ensure that you have adequate coverage. At the same time, the expert will make sure that your policy won’t cost you an arm and a leg.
Follow These Tips on How to Lower Car Insurance Costs Now
As you can see, there are so many ways on how to lower car insurance costs. From discounts to keeping a good credit score, all these can help pave the way for a more affordable policy. The most crucial thing, however, is to compare quotes and review your coverage each year.
This way, you can be sure that you’re getting the best deal and the lowest possible rates.
If you’re ready to find the best auto insurance offers, please let us know, and we’ll be more than happy to help. Use our instant online quote retrieval tool now so you can start comparing your options!