9 Tips for Lowering Your Car Insurance Premiums


With a number of companies competing against each other and offering competitive rates, there's no reason you should be overpaying for your car insurance premium. As a conscientious consumer, it's in your best interest to periodically shop around. While doing so, keep the following ways to lower your premium in mind. Paying attention to those often-overlooked details can make that monthly payment much easier to digest.

  1. Get multiple quotes

    The National Association of Insurance Commissioners (NAIC) is an excellent resource for insurance shoppers, offering a consumer buying guide that collects and compares insurance premiums from numerous companies. Because the site isn't run by insurance companies or a shill for the insurance companies, it provides an honest assessment of each company so that you can make an informed decision.

  2. Consider the car you're driving

    When haggling over the price of your next new or used car, consider the additional costs that will accompany the monthly car note, including insurance. Some cars, based on their risk and safety ratings, cost less to cover. For example, the Dodge Caliber is one of the least expensive sedans to insure, while a Porsche Carrera, for obvious reasons, is one of the most expensive to insure.

  3. Add your second vehicle to your policy

    Insurance companies offer multicar discounts because it saves them time and money on paperwork from activities such as writing policy and billing. If you've brought a new car into the fold and are satisfied with your current insurance provider, then consider adding that second vehicle to the policy.

  4. Look for discounts

    Many insurance companies offer low mileage discounts, which are best suited for drivers who aren't completely reliant on their vehicle for day-to-day use. For younger drivers, presenting a good GPA to their insurance provider could result in 5% or 10% discounts. Discounts on safety features such as anti-theft devices, and group discounts, which are awarded to members of professions or organizations, are also worth exploring.

  5. Choose a higher deductible

    If you're a safe driver, then you should be confident enough to raise your deductible to lower your premium. A deductible is the amount of money you would have to pay in the event of an accident before the insurance company steps in and pays the rest. Jumping from a $200 deductible to $1,000 deductible, for example, could reduce your premium by almost half. If you do choose a higher deductible, be sure to have enough money saved up to cover it if an accident does occur.

  6. Opt for the minimum personal injury protection

    Reliable health, life, and disability insurance should cover your medical expenses in the event of an accident. You can avoid paying double for the same thing by purchasing the minimal amount of personal injury protection required by state law.

  7. Keep good credit

    A less-than-perfect credit score can bring forth a lot of negative repercussions in a variety of ways, including raising your insurance premium by a significant percentage. It's one of many factors considered by insurance companies in determining your rate, and yet another reason why you should continue to pay those bills on time.

  8. Don't allow your coverage to lapse

    You should never allow your insurance coverage to lapse because you would be driving illegally, which could result in the suspension of your driver's license or vehicle registration. The other consequence is that it could disqualify you from receiving discounts that would lower your premium, as you may be classified as a "high risk" driver. Additionally, some states penalize drivers who allow their policies to lapse — the longer you wait to renew it, the more you have to pay.

  9. Pay premium in full

    It may seem like a steep price to pay in the short term, but in the long term it can save you a bundle. The advantage of paying your premium in full is that you'll avoid installment fees, which can total $50 to $100 during a six-month period. The insurance company benefits by receiving the entire payment, and, as mentioned before, saves money on paperwork and processing procedures.

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