It seems that literally every auto insurance company under the sun can save you money, and their commercials are dang clever. Geico promises that “15 minutes could save you 15% on car insurance.” Get Allstate and “you’ll be better protected from Mayhem like me.” E-surance is “built online” to save you money. Progressive promises you can “name your own price.” But behind all of the catch slogans and mascots how can you actually save money on your car insurance?
We Can Save You Money!
But Our Commercials Don’t Say How!
The truth is that ANY company can save you money on your coverage, it just depends on what you are willing to do to get that savings. With the average annual auto insurance premium hovering at $900 many people are looking for deals. Before you make any changes you need to know what to look for and what questions to ask.
1. Understand The Coverage You Need.
The first key to saving money on your annual policy is to dial in what coverage you need for your vehicle. Auto insurance coverage is broken down into six main coverage areas:
- Bodily Injury Liability: This covers injuries that you inflict to someone else in an accident if you are at fault.
- Property Damage Liability: This pays for damage you (or someone driving your car) does to property owned by someone else.
- Personal Injury Protection: This pays for medical expenses for the driver and passengers in your vehicle. It also covers lost wages due to injury; it covers these costs for drivers and passengers in a vehicle that you collide with.
- Collision: If your car is damaged in an accident (even if you are at fault) this will pay for those damages.
- Comprehensive: Comprehensive coverage applies to damages or theft caused to your vehicle from a non auto accident. For example if your car is damaged in a windstorm or someone steals items out of your car.
- Uninsured/Underinsured Motorist: If you are hit by someone who doesn’t have insurance or their insurance can’t cover your costs this will pay for them.
These are the six core areas of auto insurance but there may be other things included in your policy as well. You want to make sure and select options that fit your situation. You aren’t required in all states to carry all six types of coverage so check on your state requirements.
If you have an older car, you may consider only carrying liability insurance (Bodily Injury, Property Damage, Personal Injury) as a way to save money. Or if you want you can increase your deductible in certain areas, such as on your comprehensive coverage. If you don’t take your car far from home you could ditch rental car coverage entirely . Dialing in your coverage is the best way to save money on your policy. It will be unique to each person but if you need help call your insurance provider, they will gladly walk you through this.
2. Keep A Clean Driving Record
Accidents and tickets cost you big when it comes to your insurance. One of the best ways to save money on your policy is to keep up with good driving habits. Certain companies like Progressive and Allstate will even lower your premiums if you can prove you are a safe driver. Progressive’s snapshot discount Nationwide’s smartride program, and Allstate’s drivewise program allow you to hook up a small device to your car that analyzes your driving habits.
Depending on how many miles you drive, how often you hard brake, and when in the day you drive you can save up to 15% off your premiums. Plus, they promise that these programs will only decrease, never increase your costs. There aren’t very many deals like that out there. If you don’t have insurance with one of these companies there are other options. Further, simply keeping a good driving record will keep your cost of insurance from going up so stay safe out there!
3. Check For Discounts.
Carefully check into all discounts you qualify for, a simple phone call to your company can uncover these. They can include but are not limited to:
- Policy Bundle discount: If you have your auto/renter’s/home insurance with one company they will almost always give you a discount on all of them.
- Clean driving discount.
- Paid in full discount: If you pay your policy in full every six months it will be cheaper.
- Married discount: Whether fair of otherwise drivers who are married tend to pay lower premiums. If you recently got hitched make sure to let your insurance carrier know.
- Anti-theft discount: If you have an alarm system some companies will dock a little off your premium.
- Non smoker discount: If you smoke, quitting could make your auto insurance cheaper.
- Long time customer discount: If you’ve been with a company for 5+ years ask for a loyalty discount. More often than not you’ll get one.
- Good student discount: If you are still in college, or if you have students in your family their grades could help you save some money.
- Safety device discount: If you have anti-lock brakes and factory installed seat-belts and airbags.
- Military discount.
Your insurance company won’t always be proactive in notifying you about these, so ask each time you renew your policy.
4. Pay Off Your Car Loan
If you are paying off your car, getting your loan to a $0 balance can save money on your auto policy. Most insurance companies require you to carry higher (and thus more expensive) coverage on a car you don’t own outright. This is to protect themselves in case your get into an accident. If you are close to your last payment, speeding up your timeline can allow you to make changes to your insurance. Those changes (such as reducing coverage or increasing your deductibles) can keep more cash in your wallet.
5. Get A Different Car
Every year Nerdwallet.com (an excellent personal finance blog) puts out a list of the most and least expensive cars to insure. By looking at previous claims history they can determine which cars are more likely to be involved in an accident or be broken into. These are some of the worst offenders:
- High cost sports cars-more speed means more risk for an insurance company.
- Luxury vehicles-rare cars take rare parts to repair.
- Large SUV’s and Trucks-the bigger the vehicle the more potential damage it can cause.
- Honda Civic’s and Toyota Camry’s-these cars top the list of those that thieves target.
If you have a car that is on this list or fits into one of these categories consider ditching it.
6. Switch To A Military Friendly Provider.
Many service members are aware of USAA as a preferred insurance provider, but they aren’t the only company that will offer you a military discount. Here is a list of companies that offer discounts for military service:
- USAA-The standard bearer for military insurance providers. They also offer banking, investment, and retirement services.
- Geico-That’s right, the gecko offers specific discounts to military members.
As you can see there are a plethora of ways you can save on your car insurance, and we haven’t even mentioned shopping around for coverage. You should absolutely shop around for your car insurance, at least once per year. It can be a hassle to get quotes (since you usually have to give your contact info) but that little bit of trouble can be worth it. So get out there and grab some savings!
What company do you have your auto insurance with? Do you have any companies you would recommend for fellow service members?