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You probably know how important it is to have a robust car insurance policy to protect your investment in your vehicle and to be prepared in the event of an accident or other auto mishap. But no one wants to pay more than they absolutely have to for good coverage. Whether you want a simple liability-only policy or prefer one with all the bells and whistles, there are ways you can save on your car insurance. If you want to know how to save money on auto insurance, Bankrate’s insurance editorial team has gathered some easy tips to help you out.
How you can lower your car insurance cost
While many people first consider sticker price and the price of gas when it comes to the cost of owning a car, car insurance rates matter too. Depending on your circumstances, it might be a larger cost than you were expecting, especially as rates continue to increase. While there is a long list of car insurance providers you can choose from to save money on car insurance, you can also do other things to help make your car insurance more affordable.
1. Shop around
The average cost of car insurance is $2,014 per year for full coverage car insurance and $622 per year for minimum coverage. With car insurance premiums on the rise, it’s likely drivers will soon see even higher premiums.
But that doesn’t mean there’s nothing you can do about the high cost of car insurance. Car insurance companies each have their own methods for calculating rates, and your own individual rating factors play a significant role, so you won’t know how much car insurance may cost with other carriers unless you request a quote. Quote comparisons can be highly useful in determining which car insurance company offers the best rate for your desired coverage and could make it clear that you’re paying too much for coverage.
Switching providers might be an easy way for you to get the best rate. The table below showcases the nation’s largest insurance companies according to market share, and their average quoted premiums as of 2022 based on data from Quadrant Information Services, to illustrate how they compare against the national average:
|Insurance company||Average annual full coverage premium||Average monthly full coverage premium|
2. Take advantage of discounts
Another solid strategy when you need to know how to lower your auto insurance rate is to consider discounts. Companies typically offer several discount opportunities to save on insurance, many of which can be combined for even more significant discounts.
Here are some of the most common car insurance discounts offered:
- Low mileage discount: You could save by driving under a certain number of miles per year, as specified by the insurer.
- Multiple policy discount: You can often save money on car insurance and home insurance by bundling with the same carrier. Looking to see what other policy types you can insure with an insurance company might give you more than just car insurance savings.
- Loyalty discount: If you’ve been insured by the same company for a number of years, you may be eligible for a loyalty discount. Even if you haven’t, holding consistent coverage over time may earn you a discount.
- Safety feature discount: An easy discount can usually be earned if your car has safety features installed such as anti-lock brakes and airbags.
- Profession-based discount: You could save if you are part of a specific profession. This commonly applies to service professions such as teaching or nursing; most insurers also have a military discount for deployed service members.
- Good student discount: Younger drivers can be more costly to insure, but good student discounts could help to reduce that cost. For example, insurers will typically offer a student discount to those who maintain at least a B average in school.
3. Don’t pay for coverage you don’t need
When thinking about how to save on car insurance, removing coverage you don’t need can be a simple solution. For instance, you might have only had one car when you started your policy, and so you included rental car reimbursement, but now you have two. Or you might have another service that offers roadside assistance, so you won’t need it in your car insurance policy. Checking your policy to see where you might have duplicate or now-unnecessary coverage could be one way to cut down costs.
Another important decision could be choosing between full coverage and liability-only insurance. For example, you might have purchased a pre-owned vehicle a few years ago, and at the time, chosen full coverage car insurance with collision and comprehensive coverage to insure it. Over time with the car’s depreciated value, your annual premium could be more than what the car insurance company would pay out if your car was totaled. More recently, many used car values have appreciated over time, so it’s worth checking out your car’s current value when looking to update your coverage.
However, before switching to liability-only coverage, you may find it helpful to research your car’s value and average repair costs in your area to see if you could afford repairs on your own. Keep in mind that you can use our other suggestions here to earn full coverage savings. You can also speak with a licensed insurance agent to determine how much coverage is right for you.
|Average cost of car insurance in the U.S.|
|Annual full coverage premium||Monthly full coverage premium||Annual minimum coverage premium||Monthly minimum coverage premium|
4. Increase your deductibles
Car insurance coverage includes a deductible — the amount you pay before your coverage kicks in. This applies to collision and comprehensive coverage, which is what makes up a full coverage policy; liability insurance does not include a deductible. You may choose your deductible amount when you purchase your policy; common options include $500 or $1,000. A higher deductible is likely to result in a lower premium, but be careful that you don’t choose a deductible that would be difficult for you to pay in the event of a claim.
5. Improve your credit
Insurers often use a credit-based insurance score to help price premiums, except in states where the use of credit to calculate rates is banned. That said, in most states, those with excellent credit usually receive cheaper auto insurance.
If your credit could use some work, consider taking time to improve your credit score. While significant credit boosts can take time, paying off debts, setting up a monthly budget to help track bills and making on-time payments can go a long way toward reducing your insurance expenses.
Average annual full coverage car insurance rates by credit score
6. Review your policy before renewal
Periodically reviewing your car insurance policy can help ensure you’re saving on car insurance, but also that your selected coverage meets your current needs. If you’ve had any major life changes, like getting married, moving to a new location or changing your commute, your car insurance policy could use a review to ensure it reflects your current lifestyle.
It’s a good idea to take a close look at your policy once a year or whenever it is up for renewal to see if there are additional savings you can take advantage of. You may also want to ask for a few free quotes from other carriers at the same time to see if it would be worth your while to consider switching to another company.
How to find a cheap car insurance company
Here’s what you need to know to do this accurately and to help determine the best car insurance company:
- When you are collecting quotes, be sure that you are doing an apples-to-apples comparison, with the same liability limits and coverage options from each carrier. That way you can make an educated decision about the best—and cheapest—option for your needs.
- When adding optional coverages, be sure you are adding on just what you need. Many insurance experts would recommend that you purchase full coverage, especially if your car is on the newer side, but if you are trying your best to save money, you can always wait to purchase options like gap coverage or accident forgiveness when your financial situation is better. Working with an agent can help ensure you have the coverage you need.
Consider other factors, like mobile app accessibility, financial strength ratings and more. Good customer service, easy policy management tools and a quick claims payout can make for a positive experience. These factors — along with price — could help you decide which option is best suited to your preferences and needs.
Frequently asked questions
Comparing personalized quotes from several insurance companies can help you to get an idea of which car insurance company will offer you the best rate. As you gather quotes, though, be sure you are comparing comparable coverage types and limits from one company to the next in order to determine which company offers the best rates on the coverage you need. It may also be helpful to consider your unique situation when searching for cheap car insurance. You may want to tailor your search to your personal situation, whether you’re a low-mileage driver who spends less time than average on the road or are a driver with a few blemishes on your driving record.
Each driver has unique personal factors, including age, location and driving record. Because these factors in addition to others, like the make and model of the car you drive, influence the underwriting process and the final rate you pay, the best cheap car insurance provider will be different for everyone. To narrow down your list, consider which providers offer low rates on average in your area and how many discounts you would be eligible for with a particular policy.
High-risk drivers may have a difficult time finding cheap car insurance. That’s because high-risk drivers may be more likely to cause expensive accidents, and insurance companies typically balance the risk with more expensive premiums. However, whether you’re a good driver or have a few marks on your record, the same strategy applies. Shopping around, being open to different carriers and requesting quotes may give you a better idea of how much your car insurance premium will be.
Almost every state in the U.S. has a required minimum amount of insurance that you need to purchase to be on the road legally. Usually, this is liability insurance but may also include personal injury protection or uninsured motorist coverage. In addition, if you have a car loan or lease, you may be required to purchase full coverage insurance. Many insurance experts would recommend that you purchase more than the minimum amount of liability coverage so you are protected in the event that you are in a serious accident with high costs. If you are still unsure how much car insurance you need, consider working with an insurance agent.