words Alexa Wang
Are you paying too much for auto insurance?
Don’t be so quick to answer in the negative. Millions of American drivers likely do pay more than they should for auto coverage. While state law requires all vehicle owners to carry some form of auto insurance, minimum premium requirements aren’t actually a thing.
How can you find out if you’re paying too much for auto insurance? Or, put another way, what steps can you take today to reduce your auto insurance premiums?
For starters, try these 10 tips.
1. Trade Your Flashy Ride for an Economical Alternative
Your car says a lot about who you are. It may also say a lot about how much you pay for auto insurance.
Insurers know that certain types of vehicles are more likely to be involved in accidents and non-moving property damage incidents, such as break-ins and vandalism. While it’s dangerous to generalize on the make-and-model level, flashy sports cars generally cost more to insure than staid sedans. Plan your next purchase accordingly, and consider moving up your trade-in date.
2. Use a Reputable Insurance Broker
How and with whom you shop for insurance is important too. Working with well-known, leading insurance brokers like InsureOne gives you peace of mind that you’ll secure the coverage you need at a fair rate that works for you.
3. Observe the Speed Limit
A single moving violation can raise your insurance premium. It doesn’t matter whether you’re cited for driving 4 miles per hour over the limit or 40 miles per hour over the limit — the increase will happen regardless (although it may be greater for more serious violations).
It follows that one of the easiest steps you can take to reduce your auto insurance premiums is to avoid moving violations. Don’t speed, and you’ll negate a major upward pressure on your premium payments.
4. Take a Defensive Driving Course
Speeding isn’t the only driving activity that could negatively impact your insurance premiums. Enroll in a defensive driving course to learn more about premium-friendly driving habits. Your insurer may cut you a break on your policy’s premium simply for completing the course.
5. Practice Other Safe Driving Habits
Once you’ve completed your defensive driving course, put its recommendations into action. If your insurer offers a driver monitoring program, consider enrolling in it, as creating a record of your safe driving activities could reduce your premiums by 30% or more.
6. Work From Home (If Your Boss Allows)
The less you drive, the lower your auto insurance premiums are likely to be, all other things being equal. One easy way to reduce your total miles driven is to work from home whenever possible. Many employers now offer employees the option to work from home on demand; others limit work-from-home time to one or two days per week. Take whatever you can get.
7. Combine Trips to Reduce Total Time on the Road (And Miles Driven)
Plan errands in advance to reduce the total time you spend on the road and further reduce your total miles driven. Rather than going out and back home multiple times per day, consolidate all the trips you’ll need to take into a single circuit.
8. Adjust Your Deductible Upward
Do you understand the differences between collision and comprehensive coverage? Do you know when each is appropriate — and when you might be able to do with a higher deductible (out of pocket payment) on one or both? You might be surprised by how much you can save when you adjust your collision or comprehensive deductible (or both) upward.
9. Drop Coverages You Don’t Really Need
If your car is older, it probably doesn’t require comprehensive coverage at all, and it may not require collision coverage either. In general, it doesn’t make financial sense to keep these coverages on vehicles that aren’t worth the deductible, or whose repairs would total more than their market value before insurance kicks in.
10. Work to Raise Your Credit Score
It’s not fair, but it is reality: Your credit score plays a big role in determining your auto insurance premiums. Drivers with poor credit usually pay more for auto insurance, even if their driving records are clean. Take steps to improve your credit score and your insurance premiums may decline over time.
Lower Premiums Await
It won’t happen overnight, but making a concerted effort to implement these 10 premium-reducing tips could eventually pay off big for your bottom line. There’s no reason to delay any longer — unless you’re happy to pay more than you should for auto insurance.