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Joanna Johnson

Car Insurance Expert
Updated: 1/2019

Joanna is an expert on understanding how the different laws and regulations in the car insurance industry shape the way that policies work.

Car insurance protects you in the event of an accident or issue. However, this protection is not free. Smart car owners will look into discounts and savings to lower their monthly or yearly premium. This saves you money and can ease your mind. Coverage gives you peace of mind and the following savings tips protect your bank account.

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Keep Your Driving Record Clean

Insurance companies want to insure low risk drivers. This means the company is less likely to pay for accidents or repairs, and it means you receive lower plan rates. Try your best to avoid not just accidents but also things like speeding tickets or moving violations. It pays to fight these in court if you want to keep premium rates low. Be especially mindful of school zones or construction zones since speed limits decrease here. Be aware of other drivers and make sure to stay off your phone while driving. Practice defensive driving so you know what other people are doing on the ride and be especially careful in rain or snow. A little preparation, like looking at a map or pre-setting your GPS, protects you from an accident or ticket.

Compare Plans and Companies

You do not have to take the first insurance rate you receive. Insurance is a business, and you are the customer. Take the time to compare at least three different premium quotes before deciding on a company. Be transparent that you are shopping around. An insurance agent wants your business. There are even comparison websites that allow you to look at different rates and plans. Lastly, try to get a referral from a friend or family member.

Ways to Reduce Auto Insurance Costs

Type of Coverage

Remember that older cars may not need full coverage. After all, if your car is over five years old, it may not be worth paying for collision. Experts often recommend that full coverage is not needed if the car is not work eight times the amount of the premium. You can use Kelly’s Blue Book to check the value of your car against coverage rates. Remember that the more coverage you have, the more the insurance will be. That said, if you have a brand new car, full coverage makes sense in protecting your investment.

Consider Other Types of Coverage

Insurance companies often have other types of plans to purchase. For example, you could invest in renters insurance, home insurance and more. Companies may even have special packages or rates for car owners who purchase other policies.

Ask Your Employer About Discounts

Explore whether or not your job has any insurance savings. Some companies offer discounts to teachers or government employees whereas some jobs have deals with local agents. If you have recently changed a job, call your insurance company to see if this positively affects your current plan. It does not hurt to ask if it is going to saving you money.

Add Drivers and Cars

Most insurance companies offer discounts if other vehicles or drivers are added to a policy. After all, the companies want your business! It is generally less expensive to add family members to a policy versus buying a whole new policy.

Grades Are Important

If you are a student, grades really matter. Many insurance companies offer discounts to student drivers who submit their report cards. This is not just for freshman in college; some companies offer this for graduate students and even adults returning to school.

Review the Policy

If makes no sense to pay for coverage or features you do not need or want. For example, you may not need the road side assistance included in the policy and you may not want the rental car feature if you do not plan on using it. If you think about it, the chances of you being in an accident are slim. It is useless to pay for this coverage if you do not think you will need it or could pay it out of pocket for the same amount.

Credit Scores Are Important

Insurance experts use your credit score to determine your rate. They compare your credit with your driving record and the type of car you have. Take time to review your credit report to get this score as good as possible. Removing even one error or paying off old debts can really save you money on your insurance policy. Remember that you can check your credit report for free three times a year.

Consider a Higher Deductible

The deductible is the amount you pay before the insurance kicks in. Taking a higher deductible is smart if you have a savings account in case of emergencies, which means a little preparation on your end. However, if you are able to take a higher deductible, then you can save huge on your monthly expenses. This pays off in the end. Simply ask your agent what the monthly or yearly cost of the premium looks like if you go up on your deductible. The rate could really impact your budget!

Safety Features Reap Rewards

The safer your vehicle is, the less likely that it is going to be in an accident. It pays to invest in anti-theft technology or vehicles with anti-slip features or a built-in GPS. The car could come with these features or you could add to them. Ask the insurance agent you work with about which features come with discounts and consider making these adjustments. Your agent is there to work with you, and they can give you a wealth of information about discounts.

Low Mileage Comes with Discounts

Insurance plans are based on risk. If you do not drive a lot, then you are less likely to get into an accident. If your mileage is low, then you can save money. This is why it is useful to car pool with coworkers or take public transportation. You’ll be surprised when you find out how much the average miles driven per year for each state is.

Pay Now, Save Later

You can choose to pay your insurance bill a few ways: quarterly, monthly, or yearly. If you decide to pay for your insurance upfront, then you could receive a discount. Insurance companies like to do this because then they know your plan is paid for, which reduces their risk when insuring you. Even if you pay now and then switch your plan, the company will owe you a pro-rated amount for your policy. Thus, if you can swing it financially, paying now is a way to save.

The Older You Are, the Cheaper the Policy

The older you are, the more you save. For example, new drivers and young teenagers often have higher insurance plans because they have not been on the road as long. Ask about discounts for people who have been driving for more than a decade or for senior citizens. This could affect who in your home has the policy and which drivers are simply added to the policy.

Type of Car Is Important

If you are car shopping, know that the type of car you buy affects the insurance rates. Do some research when comparing vehicles so that you can save big on your policy. For example foreign cars are more expensive to repair, which means they are more expensive to insure. New vehicles have more safety features, which can save on policy costs. There is a wealth of information online, and you can even call an insurance agent and ask them their opinion. They are there for you.

Single Vs. Married

Many insurance companies offer married couples discounts. This is for a few reasons: they usually have more than one car, are usually older and they are seen as a less risky investment since they usually have two incomes. If your status changes, just let your agent know and they can adjust the cost of the insurance plan.

Take Driver Safety Classes

Lastly, you might want to consider investing in driver safety classes. You can take a traditional class or one online. This shows an insurance company that you value driver safety and it also means you are less likely to get into an accident. Many insurance companies even offer these classes via their own websites. Once completed, bring in proof of the course, and you can see the savings right away. There might even be savings for other drivers on the policy who take these classes.

Research is key when it comes to lowering insurance costs. Savings or discounts are often listed on insurance companies’ websites. You should also build a relationship with your insurance agent. They do not want to lose your business, so they are there to help you get the best rates possible. Coverage means you do not have to worry when you are on the road. Taking advantage of all of the possible discounts means you can get protection without breaking the bank!

FAQ

General Reducing Auto Insurance

This section will answer general questions people have about reducing auto insurance. 

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How to reduce car insurance?

The best way to reduce your car insurance is to talk to your insurance company and see what kinds of programs they offer which you might be eligible for. Most insurance companies have lots of different programs to reduce rates.

When to reduce car insurance coverage?

That depends on your comfort with different levels of risk. Some people go from comprehensive coverage to liability only when the pay off their car, others keep the comprehensive insurance because they feel the cost is worth the risk.

How much does car insurance reduce after 1 year?

That depends on what happens during the year and multiple other factors beyond your control. Generally, assuming you had no accidents, claims, or tickets, you can expect a 5 to 10% reduction.

Does adding a driver reduce insurance?

Adding a driver will increase the total cost of insurance but will lower the insurance on a per-driver basis.

Does being retired reduce car insurance?

It can. You should talk to your insurance company to see if they have any special programs or products for retired persons.

How can changing your deductible reduce your insurance premium?

If you increase your deductible then there’s a higher threshold of damage for the insurance company to pay out. That means it’s less likely they’ll have to spend money, and the money they’ll have to spend will be lower, so your insurance premium is reduced accordingly.

How to reduce car insurance after accident?

One of the best ways to lower your insurance after an accident is to take defensive driving or driver’s ed classes. These classes can remove points from your record while also giving you a discount on insurance.

Why does adding named driver reduce insurance?

Adding a named driver reduces the cost of insurance if the named driver has a good driving history. That’s because the insurance company uses statistics and probability to decide your rate, and adding a good driver statistically reduces the odds of a crash.

How to reduce car insurance when subletting car?

The best way to reduce your car insurance when subletting a car is to ask your insurance company which programs you can qualify for that will reduce your rate.

Reducing Auto Insurance with Specific Companies

This section will cover how to interact with insurance companies to reduce your rate

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Can final offer by insurance company be reduced?

It’s possible. You’ll need to account for the costs of representation and other fine print to determine what your final offer payout will be.

Can I ask my insurance to reduce the rate?

You can always ask your insurance company to reduce the rate. However, you might be more successful if you ask what options and programs you can enter to qualify for a reduced rate.

How to reduce State Farm insurance?

There are lots of ways to reduce your State Farm Insurance. Younger drivers can take advantage of good grades discounts, while older drivers can get low mileage or retirement discounts.

Reducing Car Insurance for Specific Drivers

We’ll cover your questions about reducing auto insurance for specific types of drivers in this section.

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How to reduce car insurance for young drivers?

The best way to reduce car insurance costs for young drivers is to choose an insurance company that gives discounts for good grades and then studying to achieve those grades.

How to reduce insurance premiums for new drivers?

New drivers can benefit from driver’s education classes to reduce their car insurance. Remember, you can take drivers ed classes beyond what is required by your state.

How can teen drivers reduce their auto insurance cost?

The two best ways for teen drivers to reduce their auto insurance costs are to get good grades and take driver’s training programs.

State-Specific Auto Insurance Reduction

This section answers your questions about reducing car insurance in specific states.

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Does taking drivers ed reduce insurance in Florida?

Yes, the state of Florida offers discounted insurance and elimination of points for taking drivers ed.

Does state of NJ point reduction points reduce insurance costs?

In many cases, yes. It depends on your specific insurance situation. You’ll need to contact your insurance company for more details. However this is only one of the ways you can get cheap auto insurance in NJ.

Does a foreign drivers license reduce car insurance rates California?

Not usually. In fact, many insurance companies will require you to get a US drivers license before providing services.

Does Maryland MVA driver improvement program reduce insurance?

It can, but that depends on your specific insurance company. You’ll need to contact them to get more information about your specific situation.

Has Michigan reduced auto insurance rates for seniors in 2018?

The state of Michigan hasn’t enacted any senior-specific auto insurance laws for 2018.

Does traffic school reduce insurance in California?

In pretty much all cases, yes. Traffic school lowers the chances you’ll be in an accident, which lowers your insurance rates.

How to reduce accident points on insurance in NJ?

There are a few different ways to reduce accident points on your insurance in NJ. The best way is to take an approved driver’s ed class.

Ways to Reduce Auto Insurance

We’ll answer questions about different ways to reduce your auto insurance in this section.

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Will having a dashcam reduce my insurance?

Not in most cases. The dashcam doesn’t reduce your risk of an accident, nor does it lower the cost or potential damages in an accident.

Does taking drivers ed reduce insurance?

In nearly every case, yes. Drivers ed programs lower the odds you’ll be in an accident. That means the insurance company can offer you a better rate.

How much does defensive driving reduce insurance?

That depends on lots of other factors, like your driving record, age, gender, car, and so on. Generally you can expect a reduction of 10% to 20%

Does online drivers ed reduce insurance?

That depends on your insurance company and state. You should check with your insurance company before you pay for a driver’s ed class to ensure your insurance company recognizes it.

Does traffic school reduce insurance?

Yes, traffic school makes people less likely to be in a crash. That means the insurance company will charge you a cheaper rate because you’ve lowered your risk.

Can you get car insurance reduced for taking public transit?

Not directly. However, using public transit reduces the miles you drive, which, in turn, can reduce your insurance costs.

Do impact windows reduce insurance?

Impact windows can reduce insurance rates, but you’ll need to check with your insurance company to be sure about your specific situation.

Does being engaged reduce car insurance?

In most cases, no. However, most companies will reduce your insurance rates once you actually get married.

Do back up cameras help to reduce insurance costs?

Potentially, but there are lots of factors that go into the cost of your insurance. Your new car with a backup camera might still cost more to insure.

Does a higher GPA reduce car insurance cost?

In many cases, yes. Most companies offer a discount for people with good grades, so a higher GPA can lower your insurance costs.

Does advanced driver training reduce insurance?

Almost always. Driver training reduces the risk the insurance company will have to pay out on a claim. That lowers your cost to the company and thus lowers the cost of your premiums.

Do vehicle trackers reduce insurance premiums?

They can. It depends on your car and what kind of insurance you have. If you have comprehensive insurance, then a vehicle tracker is more likely to lower your rate than if you only have liability insurance.

What jobs reduce car insurance?

Jobs that are statistically associated with less accidents and those that aren’t on the road much have lower insurance costs. That means jobs like teacher, accountant, and so on.

Does windshield protection film reduce my insurance premium?

It might, it depends on your car, insurance company, state laws, and specific driving record. You’ll need to contact your insurance company to get details about your specific situation.

What online testing does AAA recommend to reduce insurance costs?

AAA Roadwise is AAA’s online testing class for seniors. Those who pass the class can get reduced insurance costs in many cases.

Other Reducing Auto Insurance Questions

This section answers questions that don’t fit into our other categories. If you can’t find your question elsewhere, then this is the place to look.

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Does owning your car reduce insurance?

Sometimes. Owning your car does mean that you can get by with liability only insurance, which is cheaper than comprehensive coverage.

How much does a black box reduce insurance?

It depends on your driving record and what kind of information the black box records. If you’re an aggressive driver, then the black box could increase your insurance costs.

Can a low mile time reduce your insurance premium?

Yes, if you don’t drive very often, then there’s a lower chance you’ll be in an accident. This will lower your costs.

Does a class reduce insurance rate after speeding?

In most cases you can lower your insurance after a speeding ticket by taking a class. Be sure to coordinate with your insurance company to ensure the class you take qualifies.

Does enhanced driver's license reduce insurance premiums?

Sometimes, it depends what the enhancements are. It also depends on state law and other factors. Contacting your insurance company directly is the best way to get an answer to this question.

Does installing a lojack reduce insurance?

It can, especially if you have comprehensive coverage. A lojack increases the odds your car will be found if stolen, which reduces the chances that the insurance company will have to pay out on a claim.

Should I reduce my insurance on my old car?

That’s up to you and your preferences when it comes to risk. If you’re confident that you can deal with any situation should your insurance be lowered, then it’s a good idea.

Should I reduce my insurance to liability only?

That depends on lots of factors. If you’re financing your car, then you most likely won’t be able to go to liability only. However, if you fully own your car, then you could save money, but will face greater risk.

What age does car insurance reduce?

Car insurance rates tend to go down every year someone drives, so long as they don’t have any accidents or tickets.

What is the mileage under which MA insurance is reduced?

The state of MA doesn’t have a specific mileage number that automatically qualifies for reduced insurance. You’ll need to ask your specific insurance company.

Why do college graduates get reduced car insurance rates?

College graduates get reduced car insurance rates because they’re statistically less likely to be involved in an accident, and insurance companies use statistics to set car insurance rates.

Will autonomous cars reduce insurance costs?

It’s hard to say. Autonomous cars could have lots of different impacts on the car insurance industry. There’s not enough information to know at this point.