Does buying auto insurance seem complicated and expensive?
It doesn’t have to stress you out. And it doesn’t have to eat up your entire budget.
Knowing how to shop for insurance the right way can equal big savings on your insurance bill.
Check out these 10 tips for buying insurance for less.
1. Choose the Right Amount of Coverage
Every driver needs liability insurance. Each state sets its minimum liability coverage amounts, but it’s often better to choose higher limits.
If you cause a major accident, your liability coverage might run out before it pays for everything. You could be personally responsible for the bills above that amount.
Higher liability limits don’t increase your insurance premium too much, but those higher limits can protect you financially if you need the insurance. Liability coverage isn’t a place to skimp to save money.
If you have high-value vehicles or property, you might benefit from private client insurance. This option is only necessary when you need higher coverage amounts on your insurance.
2. Check With Multiple Companies
Have you been with the same insurer since you bought your first car?
Loyalty can earn you lower rates, but many people find that switching to other insurance companies saves them a lot in premiums.
Insurance rates change all the time. The rate you get with one insurance company won’t the same you get with another.
That’s why you need to get quotes from lots of different companies if you want to save money.
Continue checking the rates every 6 months to 1 year. A lot can change in that time, and you might find that a different company is cheaper at that point.
It’s also a good idea to check the rates if anything changes about your personal or driving situation. That might include marriage, a new teen driver, or changes to vehicles.
You don’t have to wait until your policy is up for renewal to switch to a different company. You can shop around at any time and change your policy.
3. Look at Ratings
Even if the coverage is the same, the experience isn’t always equal from one insurance company to another.
Low premiums are good, but you want a company that’s also reliable.
Do some research on insurance companies you’re considering. Do they seem to settle claims quickly and with fair settlement amounts? Do they get high marks for general customer service?
If you see lots of complaints about poor customer service, claims denials, or other issues, it might be better to choose a different company. You’ll be glad you paid a little more if you have a claim that gets paid quickly and fairly.
4. Keep Your Insurance Together
Using the same company for all of your insurance typically saves you money. Most insurers offer a discounted rate on all of your policies when you keep them together.
If you find lower rates with different companies, consider how much you’ll save with the multi-policy discount if you choose one of the companies for all of the policies. This helps you determine if it’s cheaper to keep them together or separate them.
5. Play With the Deductible
Comprehensive and collision coverages pay out for the damage to your own vehicle. If you have those coverages on your vehicle, consider adjusting the deductible amount.
The deductible is how much you pay before the insurance starts paying. If you have a $500 deductible, you pay for the first $500 of damage before the insurance company starts paying.
Bumping up your deductibles can knock down your premiums. If you currently have a $250 deductible, check the price difference to increase it to $500 or $1,000. The savings can be significant.
Don’t forget you’ll have to pay that deductible amount if you need to use the coverage. Make sure you can afford the deductible if something happens.
6. Skip Comprehensive and Collision When It Makes Sense
Liability is required, but comprehensive and collision coverages are optional.
If you have a loan on your vehicle, expect your lender to require those optional coverages.
If you own an older vehicle without a loan, you have the option to get rid of comprehensive and collision. It’ll save you a lot of money on your premiums.
When you drop them, you have no coverage for repairs to your own vehicle.
For older vehicles, the amount you save by cutting that coverage could be more than the insurance would pay out anyway. If your car isn’t worth much, you won’t get a lot for it if you have a claim.
7. Ask About Discounts
Auto insurance companies offer discounts to reward you for certain things.
If you don’t drive a vehicle very often, you could get a discount for low mileage.
Teen drivers on your policy increase your rates significantly. But your kids can help lower your rates if they get good grades and qualify for a good student discount. It’s usually available for a B average or above.
Taking a safe driving course could earn you a discount. Safety and anti-theft devices in the vehicles can also lower your rate. Verify that the insurance company takes those features into account when calculating your rate.
8. Research Before Buying a New Car
Is a new car in your future? Before you settle on the vehicle you want to buy, check with your insurance company to see the impact on your premium.
Different models will impact your insurance in different ways. Safety ratings play a role in the pricing, but it can be tough to know without getting a quote.
9. Consider Usage-Based Insurance
A growing trend is usage-based insurance, which takes into account your driving habits and mileage.
Those things are tracked with an in-vehicle device that plugs into your car. The device can tell if you brake hard, accelerate quickly, take corners quickly, or otherwise drive unsafely.
You could get lower rates if you’re a safe driver or don’t drive many miles.
10. Improve Your Driving
Your driving record influences your insurance rates, so drive with caution to keep your rates low.
It’s also a good idea to think about your spending habits. Your credit score goes into how much you pay for insurance with many companies.
Insurance companies base that on research that shows a poor credit history can relate to more insurance claims.
Working to improve your credit score could help improve your insurance premiums, too.
Save Money When Buying Auto Insurance
Part of being a responsible vehicle owner is buying auto insurance. Know how to do it the right way to save money and get the coverage you need.
Find more ways to protect yourself financially in our archives.