9 Ways to Save on Car Insurance
Saving money on your car insurance is as important to us as it is to you! We promise! We don't want you to overpay for insurance and we know that you don't want to either. Each company has different rates, discounts, and rewards available. With a little effort on your part, you can save money on your insurance premiums and keep more of your hard-earned money.
Follow our insurance guide to read about the best and easiest solutions.
Tip #1: Take a Defensive Driving Course
Taking a Defensive Driving course can save up to 10% on your insurance premiums. Some driving schools even offer discount codes! The course lasts for 3 years and can also provide helpful information that you may have forgotten about! It is always good to sharpen your driving skills AND save money on your insurance at the same time.
Tip #2: Improve your Credit Score
It may sound crazy to you, but insurance companies look at your credit score when determining your rates! They do not run hard credit inquiries and they do not see your ACTUAL score (750, etc.) but they do use their own rating systems to get an estimate of your current credit standing. It is said that individuals with higher credit ratings are predicted to be less of a risk! Studies have found that good credit scores are a reliable risk-indicating factor to help insurance companies predict losses. Insurance companies base a lot of their business model and pricing on loss prediction. It is highly recommended to make sure your credit score is in good standing before shopping for a new insurance policy.
Tip #3: Bundle your Policies
Using the same provider for all your insurance policies is one of the easiest and most convenient ways to save money. Insurance companies love to insure a “household”, meaning policy bundles, and they will make sure to give you a discount for it. Sometimes, the provider will offer you such a hefty bundling discount to create a savings package that you just can’t ignore!
Tip #4: Practice Safe Driving
Claims have a major impact on your insurance premiums. Some companies don’t even care if the claim is “at fault” or “not at fault” – they’ll still charge you for the claim! There are large discounts built into your policy for safe driving and being claim free. When you file a claim, naturally you lose those discounts. Yes, insurance companies are there to help you with claims and yes, some claims are not surchargeable, but there is more to it! You file a claim, you lose the safe driving/claim free discounts, and then the claim stays on your record for 3-5 years. Now you just lost 3-5 years of a MAJOR discount! See what we’re saying here?
Insurance companies also offer Accident Forgiveness Programs that can protect you from rate hikes, but keep in mind that those programs won’t help you if you file claims and then switch insurance companies. Our rule of thumb is: "If you can afford to fix it yourself, do it and don't file a claim!"
In the end, not all insurance claims are worth it. You’ll thank us in the long run when your insurance rates are lower than your neighbor’s.
Tip #5: Pay in Full
Most insurance companies will give you an extra discount for paying in full. You’ll also save money on their monthly installment fees! It’s usually cheaper this way since it doesn’t cost the insurance company money to process your payments each month. Every dollar counts!
Tip #6: Review your Coverage Limits
If things are changing in your life or if it’s been a while, make sure to review your policies and your coverages! Consider raising your deductibles or even removing some coverage from an older vehicle. Just because your older vehicle is in great condition with low miles doesn’t mean that having tons of coverage on it will be worth it. Maybe you have an extra car in the household now and you might not need to pay for Rental coverage. Maybe your car is now worth $1,000 but you have a $1,000 collision deductible. Check your vehicle’s current resale value and make an informed decision.
Tip #7: Pay with a Checking Account
Paying with a checking account will save you money by saving the insurance company money. We understand that a debit card technically transfers money from the same place, but the insurance company will still have to pay the higher processing fee amount on a card. They don’t pay as much processing fees if you use a checking account, which is why you’ll save money – especially if you’re enrolled in automatic payments! You’ll also end up saving more by avoiding those pesky interest fees from your credit card. 9 times out of 10, you’ll get a discount for this so make sure to ask before purchasing a policy!
Tip #8: Don’t Change Insurance Companies Often
Don’t listen to the people who tell you to shop your insurance policy every few years. Insurance companies give bigger discounts for LONGEVITY. It doesn’t make sense for the company to give you the biggest discount when you change companies so frequently. Wouldn’t you rather put 100% of your effort into a long-term relationship, rather than a short-term relationship? It’s the same with any business: they’re going to put more effort into a loyal, long-standing client which translates to bigger discounts.
Tip #9: Be Conscious About the Vehicle you are Purchasing
It’s important to understand that your vehicle has an impact on your insurance rates. A 1999 Toyota just isn’t going to cost the same amount as a 2020 Jaguar. It’s also important to understand that although you’ll get a discount for your vehicle having more safety features, those safety features cost more to fix which results in larger claim payouts! It is VERY possible that a newer car will save you money on your insurance premiums due to New Car discounts, but it’s detrimental to just assume that a newer car will automatically equate to lower insurance costs every single time. An insurance company can quickly quote a vehicle change for you. While you’re looking at new cars, call your insurance company and ask for a price quote on a few models that you’re interested in. This will save you time, money, and perhaps an unforeseen surprise!