Looking for affordable car insurance? Take these 5 steps now
Updated October 16, 2024, 2:45 AM EDT
Car insurance can protect you against financial losses if you're in an accident. Approximately 87% of drivers have some type of insurance coverage, according to the Insurance Research Council. A study by AAA estimates the average driver spends $1,202 per year on car insurance.
Shopping online for car insurance quotes is one option for finding affordable coverage when you need to save money. That may be important for your financial goals if the coronavirus pandemic has taken a toll on your household income.
- Shop around for the best car insurance provider
- Bundle homeowners insurance policies with auto insurance
- Consider safe driving courses or certifications
- Call the insurance company to find other ways to save
- Choose carefully when seeking affordable car insurance
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1. Shop around for the best car insurance provider
What you pay for car insurance is largely based on driving history, from a clean driving record to moving violations to collisions. Your rates could go higher if you had an accident that required you to file an auto insurance claim. Your car insurance premium may also increase if you have points against your license for driving violations. In that case, you may consider no-fault insurance which is designed for people with poor driving records.
"This type of insurance will only cover the bare minimum that the state requires, but it's useful to help repair a person’s record in the eyes of other insurance companies," said Josh Simpson, a financial adviser with Lake Advisory Group in Lady Lake, Florida.
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2. Bundle homeowners insurance policies with auto insurance
You could get a car insurance discount if you're combining multiple policies into one. Insurance companies may offer a multi-policy discount when you have more than one type of insurance policy, like home and auto, under a single umbrella.
If you own a home, you may be able to get car insurance through the same insurance company that issued your homeowners policy. Even if you don't own a home, you may still be able to reduce car insurance costs by bundling with another type of policy. For example, you may be able to bundle your car insurance coverage with renter's insurance or life insurance.
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3. Consider safe driving courses or certifications
Many car insurance companies offer safe driving or defensive driving discounts when you maintain a clean driving record. The insurance discount you're able to claim can depend on the insurance company and the terms of your auto insurance policy, but it's possible you could save anywhere from 5% to 20% this way.
What you should consider is the cost of safe driving or defensive driving certification. If you're able to get certified for $100, for instance, and doing so saves you $250 a year on your car insurance premium, then it could be well worth it.
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4. Call the insurance company to find other ways to save
The most effective way to save money on car insurance may be simply to ask your insurance company what options are available. For example, you may qualify for a safe drivers discount if you've had your policy for some time and you've never had to file an auto insurance claim.
Discounts may also be available if you have more than one vehicle on your car insurance policy or you have a young driver or student driver in your household. Your auto insurance company may also cut you a break on insurance rates if your car is equipped with anti-lock brakes and other safety features.
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5. Choose carefully when seeking affordable car insurance
Paying less for car insurance means saving money, but consider what trade-offs it might involve. For example, going with liability insurance coverage only instead of comprehensive coverage or full coverage could leave you paying for repairs or other expenses out-of-pocket if you're at fault in an accident. Rather than forgoing full auto insurance coverage to save money, you may be better off raising your deductible instead to lower your premium costs.
Consider the car insurance company's reputation as well as price. "Paying a few extra bucks per month for a better company will be worth it if you ever need to file a claim," said Simpson.