Car insurance is one of those expenses that leave most drivers confused and frustrated.
If you’ve ever wondered “why is my premium so high?” or “how can I lower the cost of my insurance?” then you’ve come to the right place!
While many things factor into the cost of your car insurance, you’ll still want to find a way to make it cheaper.
Car insurance companies don’t operate to offer you great coverage at a low cost. They’re a business first, meaning that their top priority is making a healthy profit.
That said, you can still work with them to make your monthly bill lower. This will come in the form of discounts and there are many different ones you may be eligible for.
Anything from bundling policies together to driving just a few miles per day is a fair game for an insurance discount.
Let’s breakdown what the best discounts available to you are and what will make you eligible for them!
Discounts Are the Best Way to Lower Your Premium
Outside of looking for a new insurance provider, your best chance of lowering your auto insurance premium is through getting discounts.
There are several different discounts you might be eligible for, but you won’t know unless you look or ask. Additionally, discounts you may have previously been ineligible for when you signed up might now be available to you.
Sometimes all it takes is to ask your provider for a lower rate. You can mention that you’ve been interested in shopping around for new insurance, which can prompt them into offering a discount to make you stay.
One discount you can rely on is gained by bundling insurance together. This typically involves auto and home insurance, but renter’s insurance is also an option.
This only results in saving for you if you already have or need to get insurance for multiple different things. You’ll usually receive a discount on both policies for bundling them under the same provider.
This becomes particularly advantageous when you have multiple policies, like auto insurance, life insurance, home insurance, and even valuable property insurance.
You’ll receive the biggest benefit here if your auto insurance is your most expensive coverage. Alternatively, you might be better off with separate providers if you can get individually cheaper plans.
Being a safe driver is by far one of the best ways to get an insurance discount.
The reason for this is that you pose a relatively low risk to an insurance provider. Their goal is to make a profit and anyone that is at a high risk of filing a claim lowers that likelihood.
When you have a proven track record of being a good driver, insurance companies are far more willing to charge you less for insurance.
They won’t need to worry about you costing them money, so a lower monthly payment is worth it for them because it incentivizes you to stay with them.
On the other hand, you can also use your clean driving record to get cheaper insurance with another provider. Insurance companies love good drivers and have no issue offering low premiums to those with a proven track record.
This tends to be a result of having few or no tickets and accidents on your driving history. If you did have them previously, they tend to fall off your record in 3-5 years depending on your state.
If you know that you’ve been a good driver for the past several years, this will drop your risk level and make you eligible for a lower premium.
One discount that tends to get overlooked is one for low mileage/usage.
The average American drives their car more than 13,000 miles per year, so anything under than number qualifies you for low mileage.
This is important for insurance companies because it means you will be spending less time on the road. Logically speaking, the less time you spend on the road, the lower your chance of getting in an accident.
There is a chance of a car crash no matter how much you drive, but limiting your time on the road reduces the number of chances that one will occur.
One problem with this discount is it can be difficult to qualify for. If you need to use your car for your daily commute, you’ll inevitably begin to rack up miles.
The main time when your mileage would decrease is if you get a new job that was located closer to your home. Carpooling is another option, but you give up the convenience of using your vehicle.
If you find that your driving has significantly dropped since you originally signed up for insurance, look into whether you’re eligible for a low mileage discount.
Another important discount to keep an eye on is one for driving a safe vehicle.
As a general rule, larger vehicles like SUVs tend to be safer in accidents. Insurance companies will also look at how fast a car is, with slower vehicles usually rated safer.
This also includes safety features like:
- Anti-Lock Brakes
- Automatic Braking
- Daytime Running Lights
- Anti-Theft Systems
- High Crash Safety Rating
This list is not exhaustive, but these are the features that most insurance companies will look for. Other features like collision warning and automatic braking are great tools but don’t have enough history to make them eligible for safety discounts.
Car insurance can get quite expensive depending on your driving history and the car your drive.
If you want to get a lower annual premium, then your best option is to seek a new provider or by hunting for discounts.
Four of the most effective discounts include bundling multiple policies, being a safe driver, low mileage, and driving a safe car.
If your insurance policy hasn’t changed in price in the last several years despite having any of these situations apply to you, then you should request a discount.
There’s a good chance that you are overpaying without needing to. Don’t be afraid to look for other insurance and use that to persuade your current provider into lowering your monthly cost.