The National Association of Insurance Commissioners found that the average American’s car insurance premiums cost around $1,134 annually (or $95 per month), though this figure varies widely depending on where you live, how old you are, your driving history, what car you drive, how many miles you typically drive, and even your credit score.
If you get a traffic ticket or minor fender bender involving insurance, you may see your rates go up next time your bill is due. Fortunately, you can switch to another provider if the new policy costs exorbitantly more, though you have other options available if most insurance providers quote you around the same price. Rather than shrugging off the cost of the premium hike, here are some options you should consider when your car insurance rates rise.
Ask About Discount Opportunities
Are you a AAA member? A veteran? A student with good grades? There are so many discounts available for car insurance based on your profession or group memberships that you’ll likely be able to find one you qualify for just by calling up your insurance provider to see what discounts exist. If you really don’t want to switch providers, your current insurance company may offer discounts for long-time customers (assuming you have a clean driving record).
Other discount opportunities exist for safety precautions (e.g., antitheft devices, defensive driving training) and low annual mileage, making you a lower-risk driver to insure if you’re not constantly on the road.
Shop Around for Car Insurance
If your current insurance provider won’t budge on your premium rate and has no discounts that you’d be eligible for, then your next step would be to set aside a couple of hours to research other car insurance providers and get quotes. It’d be useful to create a separate email address for this process to minimize the amount of spam your main email receives (car insurance websites tend to send out a lot of emails with quotes and new deals).
Some questions to ask yourself while shopping around for a new car insurance policy include:
- What’s this company’s reputation among current customers? (are they happy or dissatisfied with the coverage and customer service?)
- How much would it cost to get the exact same coverage you have now?
- Does this new company offer any extra perks that your current provider doesn’t, such as a customer loyalty program or discount for auto-pay your premiums upfront?
Increase the Deductible
What can you do if you don’t qualify for most discounts and comparing prices and policies among multiple providers didn’t lead to any breakthroughs? Your next step would be to increase the cost of your deductible, which in turn lowers your monthly/annual premium payment because you’ll be responsible for more of the costs before insurance kicks in after an accident.
If you choose this option, be sure to set aside extra money in your emergency fund at some point to make up for the potential higher repair bills that come with higher insurance deductibles.
Also, be sure to check out reviews of specific car insurance companies like this State Farm auto insurance review.
Buy Car Insurance from a Familiar Provider
Did you know that insurance providers typically offer discounts for people who have multiple policies with them? For instance, having your car and renters or homeowners insurance policies with the same provider could result in a nominal discount (though the more policies/insured individuals you add, the more you could potentially save).
This might not always be the most frugal option, so it’s worth researching your options before deciding to take out an auto insurance policy with another provider you’re currently insured with.
Get More With AAA Auto Insurance
Improve Your Credit Score
Last but not least: yes it’s true that car insurance companies evaluate your credit score when determining how much to charge you for the car insurance policy. While not directly related to driving, your credit history is intended to represent your level of responsibility and personal accountability, which is important for car insurers to assess the likelihood of you either getting into an accident, getting a ticket, and/or paying for your insurance-related costs.
If you’re confronted with a higher car insurance premium and have poor to fair credit, this is an area to improve upon to drive down your insurance costs in the long run.
Don’t sit back and groan about your car insurance premiums going up when there are so many opportunities to save if you’re just willing to put in some time and effort to research various options available to you. Whether you find relief through discounts, shopping around for a new provider, increasing the deductible, or improving your credit score, there are many ways to save on car insurance that you can’t afford to overlook.
Having a Commercial drivers license should also get you a discount on your bill as well. It worked for me. I bundle my account for the discount also. Its worth it to bundle. Good piece of mind.