16 Ways to Lower the Cost of Your Insurance
If you want to lower the cost of your car insurance, you have multiple options. Most car insurance companies offer multiple discounts, and you can also change your deductible amount or cut back on coverage options.
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UPDATED: Aug 2, 2022
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- Insurance companies offer a variety of discounts for their policyholders
- Restructuring your insurance policy may also help reduce costs
- Shopping around and comparing quotes from different companies can help you find the most affordable auto insurance in your city
With prices rising on virtually everything right now, saving money on car insurance is more important than ever. If you’re wondering how to get cheaper car insurance, a number of things can lower your car insurance rates and keep more of your hard-earned money in your wallet.
Keep reading for easy ways to lower the cost of your auto insurance, including the most common car insurance discounts.
Top 10 Discounts That Lower Auto Insurance Rates
The most common auto insurance discounts save drivers anywhere between 3% and 30% off their rates. The good news is you can often stack these discounts to get even more savings.
If you want to lower your auto insurance costs, ask your insurers for the following discounts:
- Bundling. If you have more than one policy with an insurance company, bundling your insurance policies is a great way to save on your car insurance. Some of the most well-known national companies offer this option.
- Paperless billing. Some insurance companies will reward policyholders who go paperless and manage their monthly or annual payments online.
- Auto-billing. Earn a discount by linking your auto insurance and bank accounts to pay rates on the same day every month or year.
- Full payment. Paying your annual auto insurance bill at once instead of month-to-month can earn you a percentage of your rates.
- Claim-free. Remaining claim-free for at least two to five years can often unlock great discounts and help you get cheap car insurance.
- Loyalty. The longer you stay with an insurance company, the greater the savings you can receive on your car insurance rate in the form of a loyalty discount.
- Safe driver. You may be eligible for savings if you have not had any at-fault accidents, comprehensive claims, or points added to your driver’s license during a specific time frame.
- Defensive driving. Your insurance company can give you a list of approved courses that earn discounts.
- Good grades. You can often qualify for a discount if you meet the insurer’s criteria for a good student. However, these discounts often have restrictions based on age.
- Membership. If you are part of a motor club, fraternity, sorority, alumni association, military program, etc., you can often receive a discount from select insurance companies.
Your current insurance company may offer a variety of discounts, some of which may or may not be listed here. If you’re looking for a specific kind of discount, start comparing quotes from multiple companies in your city to find one with the policy you need.
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Six More Ways to Lower Auto Insurance Rates
The easiest way to get the cheapest auto insurance rates is by keeping a clean driving record. Most companies want drivers to be accident-free for at least five years. However, you can still save money after an accident by trying the following ways to lower the cost of car insurance:
Buy a Policy Online
Signing up for car insurance online, rather than with an agent or over the phone, can save you money on auto insurance. Most major auto insurance companies have websites where customers can buy policies, file claims, make payments, and more.
For example, the Allstate eSmart discounts rewards drivers for signing up for an e-policy and managing their insurance account online.
Opt for a Higher Deductible
The lower your deductible, the higher your rates will be, so it may be worthwhile to boost your deductible amount to save money.
For example, if you can afford to increase your deductible to $1,000 or more from $500, you’ll notice cheaper rates on your monthly bill. However, you will be responsible for paying that higher amount before your insurance company starts to cover any claims.
Improve Your Credit Score
Many companies will consider your FICO score when calculating the cost of auto insurance. Drivers with higher scores pay less for auto insurance. You can raise your credit score and save on insurance by paying bills on time and reducing your lines of credit.
Consider Usage-Based Auto Insurance (UBI)
You might be able to save money by signing up for UBI or pay-as-you-go insurance, which determines rates based on how often and how far you drive. Most companies offer reduced rates to drivers who drive less than 10,000 miles per year, and certain insurance companies will also track your driving habits and reward safe drivers with cheaper rates.
Unfortunately, UBI isn’t available in every state or with every vehicle make and model.
Drive an Older Vehicle
While vehicles lose value as they age, it also makes them more affordable to repair in the event of an accident. Therefore, older cars are often cheaper to insure. If you are already considering buying a new-to-you vehicle, this tip may help you save money on your auto insurance rates.
Compare Auto Insurance Quotes Online
If you find that you are still paying more than you would like with your current insurance company, it might be time to compare car insurance companies and quotes. You might find that switching to another company will get you more discounts and lower costs.
The Bottom Line on Lowering the Cost of Your Auto Insurance
You might not be able to control the costs of gas or groceries, but there are definitely ways to reduce what you pay for car insurance.
Take a look at your current policy and see where you could reduce coverages or earn more discounts. Then, compare quotes from different companies to learn more about available discounts and policy options in your area.
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