Shopping for new auto insurance? Here are ways to save money.
Start by asking about discounts. Bundling multiple policies with one insurer can lead to savings on all your premiums. Discounts for setting up electronic payments, paying your entire premium in full, and going several years without a ticket or accident are also common ones to look for, says Laura Longero, executive editor for CarInsurance.com.
If you have a student in your family who drives your vehicles, see whether he or she has the grades to qualify for a good student discount. When your child goes to college, Longero says, insurers could reduce your premiums if the school is more than 100 miles away from your home. Or, if you’re driving less these days, see whether your insurer has a program that sets your rate based on your mileage. More major insurers have created these new programs since the pandemic.
Consider increasing your deductible or removing collision coverage. Ellen Edmonds, director of external communications for AAA, says that by increasing the deductible—what you pay out-of-pocket after an accident—you can reduce your premium. “Just make sure you could cover the higher deductible,” she says.
You may also be able to trim your insurance cost if you have an older vehicle that has depreciated in value. “You could reach a point where you’re spending more on full coverage than it’s worth for the vehicle,” says Longero. “Consider switching to liability only.” Just know that if you do crash, you’d need to cover the repairs on your vehicle yourself or buy a replacement.
As you shop insurance policies, check whether your current liability coverage limits have kept up with inflation. “It’s incredible how fast the prices of cars have gone up,” says Adam Pichon, general manager of auto insurance at LexisNexis. “If you have $50,000 of property damage liability insurance, is that going to be enough? A used F-150 might be more than $50,000 today. If you crash into one, you’d be on the hook for any uncovered damages.”
Check how an insurer compares beyond price. J.D. Power releases a study every year rating insurers on customer satisfaction for processing claims and repairs. The National Association of Insurance Commissioners scores insurers based on how many customer complaints they receive.
Improve your credit. “Research suggests that people who manage their credit well file fewer claims and are, therefore, less expensive to cover,” says Edmonds. If your credit score isn’t where you’d like it to be, make all of your loan and credit card payments on time and aim to pay down your credit card balances. This can help you save on premiums the next time you shop, not to mention help you get better loan and credit card rates in the future.
(David Rodeck is a contributing writer at Kiplinger’s Retirement Report. For more on this and similar money topics, visit Kiplinger.com.)
