Car insurance premiums tend to creep up annually. Drivers often accept these increases without question. Active management of the policy and driving habits can lead to significant savings without sacrificing necessary coverage.
1. Bundle Policies
Insurers reward loyalty. Combining auto insurance with home or renters insurance is the most effective discount. Savings often range from 10% to 25% on each policy.
2. Increase the Deductible
Raising the deductible from $500 to $1,000 lowers the monthly premium. This requires having the cash savings to cover the higher deductible in an accident. Ideally, the premium savings should be set aside to build this emergency fund.
3. Review Coverage on Older Cars
Collision and comprehensive coverage might not make sense for older vehicles. If the annual premium equals 10% or more of the car’s cash value, consider dropping these optional coverages.
4. Check for Low Mileage Discounts
Remote work has reduced driving for many. Drivers logging fewer than 7,500 miles a year often qualify for lower rates. Inform the insurer of the current annual mileage.
5. Improve Credit Score
In many regions, insurers use credit-based insurance scores. A higher credit score correlates with fewer claims. Paying down debt and correcting credit report errors can indirectly lower insurance costs.
6. Take a Defensive Driving Course
Accredited defensive driving courses remove points from a license and trigger discounts. These courses are often available online and cost relatively little compared to the potential savings.
7. Shop Around Annually
Loyalty does not always pay. Intro rates expire. Quote comparisons every year ensure the current rate remains competitive. Switching carriers is a standard administrative process, not a betrayal.