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.

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!