If you own a car, you have to carry auto insurance. In addition to being a smart strategy in case you’re ever involved in an accident, it’s also the law. But this doesn’t mean you have to pay through the nose for automobile insurance.
Turns out there are plenty of discounts out there – you just have to know where to look. We’ve taken the guesswork out of finding these low rates for you, so read on to save yourself some money on your annual insurance bill.
Improve Your Credit Score
If you live in California, Massachusetts, or Hawaii, you can skip this tip – auto insurers in those states aren’t allowed to check your credit when determining the cost of insurance. In every other state, however, your credit rating will be one of the determining factors in setting your rate.
Naturally, there are plenty of other reasons to pay your bills on time, rack up just the right amount of debt, and otherwise be a good steward of your credit rating. So, if yours is lower than 650, take steps to improve it.
Have a Good Driving Record
The more violation points you have on your driving record, the higher your insurance premiums will be. Accidents and traffic tickets will negatively impact your insurance rates, but if you’re ever offered the chance to take a course in traffic safety to reduce your points – take it! In some instances, a few hours spent in traffic school could even wipe an accident or tickets off your record altogether.
Bundle Your Home and Auto Insurance
Do you have homeowners’ insurance and auto insurance? Are they from different companies? It might be worth your while to bundle them together. Ask your agent(s) about any discounts they might offer if you do so.
However, know that bundling won’t necessarily save you money. In some cases, you could be getting the lowest possible rates from separate insurers. Just do your research, and review your rates on a regular basis.
Check Your Affiliations
There are all kinds of under-the-radar discounts that can lower your bill – without you having to do anything except ask for them. If you are an active service member or a veteran, a first responder, an educator, a government employee, or a medical professional, some companies will knock a few bucks of your bill just to say thanks.
Discounts are also available for members of professional organizations, fraternities or sororities, and alumni groups. Ask your agent, or search online to see which of those membership cards in your wallet might help you keep more cash in that wallet!
Look into Vehicle Features That Insurers Favor
You already know that owning an expensive sports car or luxury SUV will drive up your insurance rates, as can living in certain neighborhoods, commuting long distances to work or school, or parking your car on the street rather than in a safe garage. But did you know that certain cars and options are eligible for discounts?
If you drive a hybrid or electrical vehicle? Discount. Have an antilock brake system, safety features such as airbags and motorized seat belts, or an alarm system? Discount. Daytime running lights? You guessed it – a discount.
Actually, it’s more accurate to say “potential discount,” as not all insurers will reward you for every feature. But it’s worth asking about – and if you’re in the market for a new car, make sure to look into features that might qualify you for a lower rate.
Consider Raising Your Deductible
Do you feel lucky? If you are a safe driver, don’t drive often, or don’t mind throwing the dice, you could consider raising your deductible to shave money off your auto insurance rate.
A lower deductible means that in the event of an accident or damage to your car, the insurer will pay out more money on a claim. For that reason, it also usually means a higher monthly or annual rate. Raising the deductible is a gamble, though, so don’t take this route unless you have an emergency car-repair fund.
Drop Coverage You Don’t Need
Drivers aren’t required to carry collision or comprehensive insurance, and you may not need them. Collision insurance covers you in the event of damage to your vehicle caused by an accident – driving into a tree, flipping your vehicle, smashing into a guardrail. Comprehensive insurance covers all non-accident-related damage, such as damage from hail, high winds, a piano dropping on your car, or theft.
Particularly if your car is well on its way to being a clunker, these types of insurance might be costing you unnecessarily. A quick way to determine whether or not you can drop collision and comprehensive is to add your deductible to the amount of insurance you pay annually. If the total is higher than what your car is worth, ditch these two types, and put the money you save into that car-repair fund mentioned above, or save it towards a down payment on your next vehicle.
Ready to Start Saving?
Even if you don’t qualify for any of these discounts, it’s still smart to reevaluate your policy each year to make sure you’re not missing out on a way to lower your rate. Contact your insurance agent, spend some time browsing insurance companies’ websites, or take a look at Mercury’s low cost options.
Do you belong to any organizations that net you an auto insurance discount? Are there any hidden discounts that we’ve missed in this article? Have your say in the comments below!