Car insurance costs have increased by more than 22% since last year due to insurers playing catch-up following the pandemic. Many consumers are shopping for new insurance to try and lower their bills. One way to save money is by paying your annual premium all at once, rather than monthly. Currently, insurers are increasing rates even as vehicle prices cool, but experts expect these premium hikes to taper off as time goes by.
To lower your car insurance bill, it is important to shop widely for discounts. Policyholders often miss out on potential savings by not checking all the discounts available, such as military discounts or bundling opportunities. Experts recommend contacting your insurer or agent to inquire about potential discounts. Additionally, organizations like professional associations or alumni groups often negotiate discounts with insurers. Employers may also offer benefits that can help reduce monthly costs, even if the discounts are not drastic.
Taking a defensive driving course is a simple strategy to save on car insurance. Completing these courses, which are often available online, can result in considerable savings, with discounts up to 10% offered by carriers in many states. Some insurance companies also offer programs for good driving behavior that track habits like braking patterns or times behind the wheel to determine discount eligibility. Pay-per-mile plans may benefit remote workers or those who do not drive much, with programs like Nationwide’s SmartMiles offering variable rates based on mileage.
Families with teen drivers can see increased costs on their insurance policies, especially if young drivers have repeated infractions. Adding teen drivers to an existing policy or bundling them may be cheaper than buying a new one, but it is important to consider the potential increase in costs due to risky driving behavior. Academic achievements can also help lower insurance costs, as many carriers offer discounts for “good student” grades. Maintaining a B average or performing well on standardized tests could result in substantial savings, with some insurers offering up to 30% off for high marks.
Reviewing your policy for redundancies and areas of overlap can help lower your insurance costs. For example, if you already have AAA roadside assistance, you may not need similar coverage on your auto insurance policy. Increasing your deductible can also lower your monthly premiums, but it is important to have enough cash set aside for emergencies in case you need to meet a higher deductible. Experts caution against slashing too many areas from your policy without ensuring you are not underinsured, and recommend building up an emergency fund before making any significant changes to your coverage.
