Wall have more than our fair share of bills each month with many retirees living on fixed incomes. Having enough auto insurance is a smart move but let’s face it, it adds to the expense of driving. When it comes to auto insurance rates, unfortunately, they are unlikely to come down, but there are a few things you can do to minimize your bill.
- Be a mindful driver. Teen drivers are four times more likely than seasoned adults to drive distracted and get into serious crashes. The more focused you are, the more accidents or moving violations you’ll avoid—events that can raise your auto insurance rates through the roof. Points are typically assessed to a driver for moving violations, and the more points, the higher insurance premiums.
- Check out other companies. Has your auto insurance company suddenly raised your rates? Is your policy about to renew? Why not check out rates from competing insurance companies? Many industry experts even recommend obtaining quotes from various insurers every year or two to compare rates and offerings.
- Consider public transportation. One of the first questions an auto insurer will ask is how many miles do you drive in the course of a year. If you are a daily auto commuter then you will probably pay more in premiums than someone who only uses their vehicle recreationally. If convenient, why not rack up fewer miles by relying on public transportation for your daily commuting needs. Be sure to first inquire about your insurer’s different mileage thresholds, so your efforts won’t be wasted.
- Rethink that big vehicle. Insuring a hefty ride can be more expensive than insuring a small (but safe) one. Some companies offer premium reductions on hybrid or alternative fuel vehicles; Farmers Insurance offers a 5 percent discount. Get a quote from an auto insurer BEFORE you make a vehicle purchase to get an idea as to how much you’ll be paying for a premium.
- Increase your deductible. Your premium rate will go down if you choose a higher deductible. How much? That depends on your insurer, the state you’re registered in, and other factors. According to the Insurance Information Institute, increasing your deductible from $200 to $500 could reduce collision and comprehensive costs by 15-30%; going to a $1,000 deductible could save 40%. Of course, be sure you have enough money set aside to pay the higher deductible in the event you have a claim.
- Reduce optional insurance. As a rule of thumb, if your older car is worth less than 10 times the insurance premium, having collision and/or comprehensive coverage may not be cost effective. To find out whether this is true for you, check the value of your car. You can look up what your car is worth for free on websites such as Kelley Blue Book, Edmunds, and TrueCar.
- Look into group insurance. Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups, or from other associations. Check with your affiliated organizations to see what they offer.
- Inquire about other discounts. There are other discounts that your insurer may offer to its policyholders. For example, some companies offer discounts to those who have not had any accidents or moving violations during a specified period, or who have taken a defensive driving course. If there is a young driver on your policy who is a good student, has taken a driver’s education course, or is away at college without a car, you may also qualify for a lower rate. Ask your insurer what discounts you might qualify for, but keep in mind that what’s important is the final cost of your policy. A company that offers few discounts may still be able to give you a lower overall premium price.
- Let Gabi shop insurers for you. There’s a new tool that is a godsend called Gabi. The tool is free and acts as an insurance aggregator (meaning, they will pull in a bunch of providers that you can compare) but there’s one big difference – they do this based on your existing auto insurance. You simply upload a PDF of your current policy and let Gabi do her thing. Gabi analyzes your bill and searches for a comparable plan at another provider for less money. And best of all, if Gabi can’t save you money, you’ll be advised to keep your current policy.
