When the prices of goods are high, people look out for discounts and coupons. Similarly, now that auto insurance premiums are going through the roof, you are left with no choice but to seek tips for lowering your auto insurance premiums in the United States. Otherwise, you risk losing your coverage.
In a recent report, CNN stated that car insurance rates have had the highest annual increase ever recorded in 47 years. Compared to last year, the cost of this insurance has increased by 19%. Severe weather condition was pointed out as one of the possible causes of the increase. Unfortunately, that is something we can’t control.
Although you may not be able to completely stop the increase in insurance rates, you can take measures to lower your premium as much as possible. Read on to discover some of the things you can do to achieve this.
Easy Ways to Lower Your Auto Insurance Premiums in the United States
1. Make Comparisons
There is no crime in comparing quotes of potential insurance providers before choosing the best fit for you. There are numerous auto insurance companies in the United States. You can obtain quotes from up to three or five of them before making a pick. USAA, Auto-Owners, Westfield, Geico and Travelers are the cheapest car insurance companies nationwide, according to Forbes Advisor.
You can obtain quotes by visiting the insurance company’s website and using their online quote tools. Or, you can call the company directly to speak with an agent or representative. another option is to Contact independent insurance agents who can provide quotes from multiple companies. Carefully examine the quotes you receive. Pay attention to the following details:
- Premiums: The cost of the policy.
- Deductibles: The amount you must pay out of pocket before your coverage kicks in.
- Coverage limits: The maximum amount your insurance will pay for different types of claims.
- Additional features: Consider any extras, like roadside assistance or rental car coverage.
When requesting quotes, be sure to provide accurate and consistent information to each company. Any discrepancies can affect the accuracy of the quotes you receive.
Keep in mind that price is just one factor to consider. Research the reputation of the insurance companies you’re considering. Look at customer reviews, ratings, and complaints to gauge the quality of their service.
2. Request a Higher Deductible
The deductible is the amount you agree to pay out of pocket before your insurance coverage kicks in. For example, if you have a $500 deductible and file a claim for $2,000 in damages, you will pay the first $500, and the insurance company will cover the remaining $1,500.
When you increase your deductible, you are essentially agreeing to take on more financial responsibility in the event of an accident or claim. This shift in risk means the insurance company is less exposed and, as a result, may allow lowering your auto insurance premiums in the United States.
While increasing your deductible can lead to lower premiums, it also means you’ll have to pay more out of pocket in the event of a claim. Make sure you can comfortably cover the higher deductible if needed.
By raising your deductible, you may become more cautious when deciding whether or not to file a claim. Smaller claims that are just slightly above your deductible may not be worth filing.
Also, the decision to increase your deductible should take into account the value of your vehicle. If you have an older car with a lower market value, it might make more sense to have a higher deductible since repair or replacement costs are lower.
3. Check for Discounts
Discounts are always a smart money move and you can take advantage of them to enhance the overall value of your auto insurance policy. This means that you can receive the same coverage but at a lower price, making your insurance more cost-effective.
Ask your agent about discounts so that you can identify those that apply to your situation. Some of the common discounts include;
- Renewal Discount: Staying with the same insurance company upon policy renewal may qualify you for a discount.
- Pay-in-Full Discount: Paying your annual premium in a single lump sum can result in a discount compared to monthly payments.
- Defensive Driving Course Discount: Completing a defensive driving course can make you eligible for a discount.
- Good Student Discount: Students with good grades, typically a “B” average or better, can often receive a good student discount.
- Multi-Car Discount: If you insure more than one vehicle with the same insurance company, you may be eligible for a multi-car discount.
4. Remove Unnecessary Coverage
Removing unnecessary coverage is a practical tip for lowering your auto insurance premiums in the United States. Auto insurance policies can include a range of optional coverages that may not be essential for every driver. By carefully evaluating your needs and the value of these optional coverages, you can reduce your premiums while still maintaining adequate protection.
An example of this is a comprehensive and collision coverage for older vehicles. For older cars with a low market value, it may not be cost-effective to maintain comprehensive and collision coverage. The cost of the coverage may exceed the potential payout in case of a total loss.
5. Bundle Your Policies
Insurance companies often offer a multi-policy discount, also known as a bundle discount, to customers who purchase more than one policy with them. Typically, you get a discount on each policy when you bundle. With this, you can earn a 5% to 25% savings. Moreover, when policies are with the same company, there’s less room for coverage gaps or disputes over who should handle a particular claim. The most common bundle is combining your auto insurance with your homeowners or renters insurance.
6. Consider the Type of Vehicle
Considering the type of vehicle is essential if you wish to lower auto insurance premiums in the United States. If you are yet to buy your car, keep in mind that the characteristics of your car play a significant role in determining the cost of your insurance coverage. For instance;
- Sports cars and high-performance vehicles tend to have higher premiums due to their increased likelihood of being involved in accidents.
- Luxury cars may also have higher insurance rates due to their expensive parts and repair costs.
- Sedans, minivans, and family-oriented vehicles are often associated with lower insurance premiums because they are seen as safer and less likely to be involved in high-speed accidents.
Also, vehicles with high theft rates or poor safety ratings may result in higher premiums because they are considered riskier to insure. The Insurance Institute for Highway Safety (IIHS) and the National Highway Traffic Safety Administration (NHTSA) provide vehicle safety ratings that insurance companies use to assess risk.
7. Be a Good Driver
A tip as basic as having a good driving record can be substantial enough for lowering your auto insurance premiums in the United States. A good driving record means you’re less likely to be at fault in accidents. Hence, you are less likely to file insurance claims for property damage, injuries, or medical payments. This translates to a lower overall cost for the insurance company, leading to lower premiums for you.
8. Reduce Your Mileage if Possible
Covering fewer miles lowers your exposure to the road, which in turn decreases the likelihood of incurring damages. Hence, many insurance providers offer low-mileage discounts to policyholders who drive below a certain threshold. If you meet the criteria for low-mileage discounts, you can enjoy reduced premiums.
If you drive fewer miles, you may also consider Pay-As-You-Drive (PAYD) programs. Some insurers offer usage-based insurance programs where your premiums are calculated based on your actual driving habits and mileage. These programs often provide substantial discounts to drivers who demonstrate safe and infrequent driving.
It’s important to understand that not all insurance companies offer the same low-mileage discounts or have the same mileage thresholds. Some providers may also have specific programs or apps that track your driving habits to determine your eligibility for discounts.
9. Boost Your Credit Rating
Studies have shown a correlation between lower credit ratings and a higher likelihood of filing insurance claims. Therefore, those with better credit scores are often considered less risky to insure. This causes insurance companies to use credit-based insurance scores as one of the many factors to assess the risk of insuring a particular individual.
While not all states permit the use of credit scores for insurance rating, a significant number do. Hence, it may help if you can boost your credit rating. According to Forbes Advisor, drivers with poor ratings pay an average of 76% more than those with good ratings.
Here are some tips for improving your credit score:
- Pay your bills on time and in full to establish a positive payment history.
- Reduce credit card balances and manage credit utilization effectively.
- Avoid opening too many new credit accounts in a short period, as this can lower your credit score.
- Regularly review your credit report for inaccuracies and address any errors promptly.
- Consult with a credit counsellor or financial advisor to develop a strategy for improving your credit.
10. Install Safety Features
Installing safety features in your vehicle can reduce the risk of accidents and insurance claims. Hence, it is a good avenue for lowering your auto insurance premiums in the United States. Insurance companies often offer discounts for cars equipped with these safety features. Make sure you confirm that the cost of installing the device offers you significant savings.
Common safety features that can help lower auto insurance premiums include:
- Anti-theft devices
- Advanced driver assistance systems (ADAS)
- Lane departure warning
- Blind-spot monitoring
- Collision avoidance systems
- Vehicle tracking and recovery systems
- Airbags
Summary
Lowering your auto insurance premiums in the United States requires that you commit to finding what works for you. The process can be as rigorous as comparing different insurance companies or as easy as maintaining a good driving record. Moreover, you can enjoy more than one discount channel if you are eligible for them. You just need to discuss it properly with your agent. It is important to open up and communicate effectively with your agent so that they can help you make the most favourable financial decision.
