Tips for Lowering Your Auto Insurance Costs

With two exceptions (New Hampshire and Virginia), every US state mandates drivers to have a minimum requirement of auto insurance coverage. And even in those two exempt states, it’s important to have a policy in place, especially in the case of an accident where you’re found at fault.

Of course, with coverage comes cost. As many drivers are already paying a monthly loan or lease installment, the added expense of insurance can come as an unwanted burden. How much and what type of coverage do you need? And what factors determine your auto insurance rate, as far as decreasing or increasing your premium? 

Before beginning your quest to find the right auto insurance policy, it’s important to be aware of all the ways you can lower your rate. Here are a few different ways to save money when buying car insurance.

An important caveat when it comes to auto insurance is that every state is different, as far as minimum coverage requirements and underwriting processes. For example, in four states (California, Hawaii, Michigan, and Massachusetts) an applicant’s credit score and history are not factored into their eligibility or what kind of rate they can get. In the other 46 states, however, 95% of carriers weigh applicant credit ratings when determining rates, due to a correlation between (link: https://fiona.com/learn/articles/4-consequences-of-bad-credit text: bad credit and number of claims filed) bad credit and number of claims filed.

As a result, it’s important to know your credit score before applying for car insurance, which can be found out by accessing an official credit bureau service. A poor credit score, typically below 600, can have a negative impact on your auto insurance rate. To make sure you don’t fall under that category, it’s prudent to pay your bills on time and take steps to reduce/eliminate debt, which can help boost your credit score and improve your chance of getting lower-cost car insurance.

Having a Clean Driving Record

Of course, insurance carriers are also conscious of applicants’ driving records, as far as accident history and moving vehicle violations are concerned. While a driver cannot undo past accidents or infractions, it’s important to keep a clean record by clearing any unpaid tickets for moving violations and making sure any outstanding points are taken off your license. 

On the other hand, drivers with good records and no-to-limited history of accidents/violations are often eligible for discounted rates, based on the policy chosen and carrier. Applicants can also take a defensive driving course to become eligible for a discounted rate or partial refund, which is common practice for many top carriers on the market to offer. 

Streamlining Your Policy

Aside from individual factors, applicants can also choose policies with cheaper premiums based on what is covered under the contract. For instance, while the bare minimum of an auto insurance policy is liability protection (which covers bodily injury or property damage sustained by another driver), some applicants may choose to forego comprehensive insurance, which covers damage to your car caused by theft, fire, vandalism, or natural disasters. 

An applicant can also consider pay-per-mile (PPM) insurance, which bases your premium on how much you drive, or telematics insurance, which rewards safe drivers for not speeding, as well as other good behavior. 

Explore Possible Discounts

Yes, you can get a discount for being a safe driver or taking a defensive driver course, but that’s not where it stops. There are multiple discount offers depending on the carrier, which allow applicants to lower their rate based on: their occupation, organizational association, the school they attended, their car’s safety/security features, and more. Consumers can also lower their rate by bundling their auto insurance with homeowner’s insurance, or by choosing to pay their annual premium in a lump sum rather than month to month. 

Bottom Line

As you can see, there are many methods available when seeking the most affordable auto insurance policy to meet your specific needs. Last but not least, it’s important to compare offers from multiple carriers, as the state you live in, along with your personal preferences, can determine which carrier and policy make the most sense for you. Luckily with Fiona in partnership with Jerry, you can get matched with personalized policy quotes for car insurance from top carriers, all in one convenient place.