When you’re trying to find the cheapest car insurance, it can feel like there are a million different factors you have to consider. Premiums, deductibles, coverage limits and more all come into play when looking for affordable auto insurance.
But with so many variables, how do you know which combination of cost and risk is best for your situation? To get the most out of your car insurance policy, it’s important to understand all the ways that you can save money on your premium.
There are many ways to reduce your car insurance costs, from shopping around to taking advantage of opportunities that may not be obvious. Since everyone has different needs, we’ve outlined some of the best ways to save money on car insurance below:
Shop Around for the Cheapest Car Insurance
This seems like a no-brainer, but it’s important to remember that not all companies are created equal. While premiums are typically based on risk, every company is likely to offer different coverage options and prices based on one’s willingness to pay. If you’re looking to get the best value for your money, it makes sense to shop around and compare different providers to see who can offer you the best deal.
Some insurance companies will allow you to switch policies without a waiting period. Others will give you a rate based on your current circumstances. Either way, it’s important to shop around to ensure that you’re getting a fair price. As a general rule, it’s wise to avoid purchasing car insurance from the same provider as your home or renter’s insurance.
Doing so may give you lower rates, thanks to the fact that these providers are likely to have a better idea of your risk profile than a car insurance company does.
Bundle Your Auto and Home Insurance Together
If you want to get the best possible deal on your car insurance, it may be worth considering bundling your auto and home insurance together. Doing so allows you to take advantage of the fact that insurers know more about your risk profile since they are also insuring your home.
This gives you the opportunity to take a reduced rate, since you’re essentially showing that you’re a lower risk. If you have a clean driving record, have taken advantage of good driver discounts, have installed safety devices in your car and have taken other steps to reduce your risk, it may be possible to get a cheaper policy just by bundling your car and home insurance together. It’s important to note that not everyone will be able to take advantage of this option. Your home insurance provider will likely want to see that you have a clean driving record.
Depending on the provider, you may also have to take a defensive driving course in order to be eligible for a discount. Once you’re approved for a discount, it’s likely to be at least 5% lower than the normal cost of your home insurance. You may also be able to lower your car insurance rates by bundling your policies together, so it’s worth seeing if any providers offer this option.
Estimate How Much You’ll Pay for Car Repairs
An important aspect of car insurance is understanding how the deductible works. This is the amount that you have to pay out of pocket before your coverage kicks in. By estimating how much it will cost you to repair your car in the event of an accident, you can more accurately gauge how much coverage you’ll need to protect your finances. While some providers will ask you to select a deductible amount, others will ask you to select a “coverage amount.” This refers to the total amount of coverage that you have—not the amount that you will pay out of pocket. By estimating the cost of repairs, you can ensure that you have the right amount of coverage to protect yourself in the event of an accident. If you’re financing your car, it’s important to note that your car’s value will be factored into your monthly payments. If you are at fault for an accident, your car may be worth less than you owe. By choosing a higher deductible, you can reduce the amount of coverage you need and reduce your monthly payments.
Check Out No-Fault States
If you live in a no-fault state, you may be able to reduce your premiums by choosing the no-fault coverage option. No-fault states require drivers to purchase PIP or personal injury protection to account for the costs associated with medical care following an accident. This coverage provides a set amount of coverage per person, regardless of fault in the accident. While no-fault coverage is optional in some states, it’s required in others. It’s important to understand that opting for PIP coverage will reduce your premiums by roughly 15%. If you’re able to reduce your premiums by this amount, it may be worth considering no-fault coverage. It’s important to note that not all states offer PIP as a coverage option. If your state doesn’t offer no-fault coverage, it’s important to understand that opting for PIP coverage will only reduce your premiums by about 2%.
Check For Discounts Based on Good Behavior
Some car insurance companies will offer discounts for good behavior. While these vary widely, some providers offer discounts for driving less than a certain number of miles per year, having a clean driving record, installing safety devices in your car, having a well-maintained vehicle, or taking specific courses or tests. By taking advantage of these opportunities, you may be able to reduce your premiums by up to 10%. It’s important to remember that some of these discounts are only available as annual credits. This means that you have to make sure that you maintain the standards of the program (driving less than a certain number of miles per year, for example) for 12 consecutive months before you’ll start to see a reduction in your premiums. Others will drop your rate as soon as you’ve taken the necessary steps to qualify.
Know Which Coverages You Need and Which You Don’t
While all car insurance policies will include coverage for bodily injury and property damage, not every provider will offer coverage for your health. In the event of an accident, bodily injury coverage will pay for the medical expenses of anyone injured in the accident. Property damage coverage will pay for the costs of repairs to property that was damaged as a result of your accident. Health coverage will pay for any medical bills related to injuries incurred by those in the car and may also provide a small monthly income if you are unable to work as a result of your injuries. While you do need bodily injury and property damage coverage, it’s critical to understand that health coverage is optional. While most people assume that they need this coverage, it’s important to note that it’s only designed to protect you in the event that you’re injured in an accident and unable to work. If you’re healthy, it’s unlikely that you’ll need this coverage.
When you’re trying to find the cheapest car insurance, it can feel like there are a million different factors you have to consider. Premiums, deductibles, coverage limits and more all come into play when looking for affordable auto insurance. But with so many variables, how do you know which combination of cost and risk is best for your situation? To get the most out of your car insurance policy, it’s important to understand all the ways that you can save money on your premium. There are many ways to reduce your car insurance costs, from shopping around to taking advantage of opportunities that may not be obvious. Since everyone has different needs, we’ve outlined some of the best ways to save money on car insurance.