Insurance companies use some pretty complicated math to calculate your insurance premiums, but most insurance customers aren’t interested in statistics or actuarial tables – they’re interested in saving more money! A cousin of mine recently asked me how he could save a few bucks a month on their insurance premiums and I was happy to deliver the great news: there are plenty of ways to reduce your premiums, even while maintaining the same level of coverage that you need for your unique insurance situation and to comply with local regulations.

Here are 15 tips for lowering your auto insurance rates that could work for you!

1. Eliminate Unnecessary Coverage

State governments set mandatory minimum coverage amounts for car insurance, but all insurance companies offer coverage above and beyond what’s required by law to ensure that you and your vehicle are adequately protected. Whether you need that extra coverage or not is up to you, but if you decide that certain types of coverage aren’t essential for your specific vehicle and circumstances, you can lower your auto insurance rates by doing away with the excess coverage. For example, if your car is nearing the end of its life cycle and has a low actual cash value, it might be worth it to drop your collision or comprehensive coverage to save on premiums.

2. Drive an Older Vehicle

Older vehicles are less expensive to repair – because they’ve been on the road for longer, it’s usually easier to source parts and find a cheaper mechanic that knows how to work on them. Lower repair costs means lower insurance premiums, so consider purchasing an older vehicle instead of a brand new one to save on your monthly insurance costs.

3. Buy Domestic Instead of Imported Cars

There’s a big difference between repairing a BMW and repairing a Chevrolet. Luxury import cars have more expensive parts that must be imported from overseas, and it’s harder to find a mechanic in America that knows how to work on them for a reasonable rate. The additional costs of parts and labor for repairing foreign cars are a hidden contributor to high premiums, so consider purchasing a domestic vehicle that’s cheaper and easier to repair if you’re looking to save money on insurance premiums.

4. Improve your Credit Rating

Forty-seven states allow insurance companies to look at your consumer credit report when determining how to price your insurance, though the practice is banned in Massachusetts, Hawaii and California. If you’re considered at-risk for defaulting on your payments, you’ll find yourself paying more for coverage. You can improve your credit rating by keeping a good payment history and paying down any outstanding debts you have.

5. Invest in Winter Tires

If it snows where you live, some insurance companies will offer a discount if you use winter tires on your car. Winter tires grip the road better, helping you maintain traction and avoid collisions in slippery winter conditions.

6. Reduce Your Annual Mileage

The more you drive per year, the more you’ll pay in insurance premiums as your chances of being in a collision increase with every mile that you drive. If you can take public transit instead of driving to work and reserve use of your vehicle for weekends, you could save on insurance, gas, parking, and other costs that amount to thousands of dollars per year. You’ll also gain some productive time while on transit that you can use to respond to e-mails or catch up on reading. Check with your insurance company on how to send proof of mileage so you can get an accurate rate for how much you’re driving.

7. Apply for Discounts

Check to see what discounts could apply to you. Your insurance company may offer discounts for completing a driver education program, through your membership in a professional association, or as a reward for enrolling in a roadside assistance program in your area. Even if you’ve been with your insurance company for a while, they may have added a new discount since the last time you checked – it never hurts to ask!

8. Increase Your Deductibles

Deductibles are inversely related with insurance premiums – when you increase your deductible, it decreases how much your insurance company pays for a claim and reduces your premiums accordingly. If you can afford to pay a higher deductible when you make a claim, you’ll save some extra money on your premiums each month that you can put towards something fun – just remember to keep enough savings on hand to cover your deductible if you need to make a claim.

9. Install Anti-Theft Devices on Your Vehicle

Check to see if your insurance company offers discounts for anti-theft devices. It’s much harder for a thief to steal your car if the wheel is locked in place or has a homing device installed, and your comprehensive insurance rates should reflect the improved security.

10. Clean Out Your Garage

In a similar vein, if you can create enough space in your garage to fit your car, it’s much safer from things like weather damage, falling tree branches, thieves, arson, and other risks. If your car is parked on the street around bars or a lot of foot traffic, you’re much more likely to make a comprehensive claim. Some insurance companies will even give you a discount if you regularly park your vehicle in a locked garage.

11. Get Married

On average, men pay more for insurance than women do, and most people know that their rates will change as they get older, but did you know that married people (both men and women!) are statistically less likely to be involved in a collision and pay less in insurance premiums? I don’t know about you, but I definitely drive more safely with my family in the car. I’m not saying you should get married just to save on insurance, but it’s a nice perk!

12. Shop and Compare Quotes

At least once every couple of years, you should shop around for quotes and consider switching insurance companies if you can find a better price elsewhere. Traditional insurance agents can be helpful but they might be motivated by commission to place you with a certain company, so the best way to search is by using a web-based company like Freedom National that gives you their best price up-front so you don’t have to wonder if you’re getting the best deal. Don’t be afraid to switch companies if you can get the coverage you need cheaper elsewhere.

13. Stop Crashing into Things

Maintaining a clean driving record is one of the best ways to lower your insurance premiums over time – but that’s not the best news if you’ve recently been found at fault for a collision. Still, you can commit to driving safely going forward, and those accidents will eventually fall off your record in a couple of years. Be responsible for the car in front of you, don’t follow too closely, and avoid speeding tickets and other traffic fines that can lead insurance companies to hike up your premiums.

14. Hook up a Dash Cam

Sometimes you’re in a collision with another driver and it’s their word against yours – and not everyone is honest when it comes to reporting incidents that could raise their auto insurance rates. To protect yourself, install a dash cam in your vehicle that records automatically when you start driving. You’ll be able to prove exactly what happened in the event of a collision and protect yourself from other drivers misreporting incidents that could result in increases to your auto insurance.

15. Enroll in a Telematics Program

Some insurance companies offer applications that monitor your driving behavior and reward you for driving safely. Telematics programs can be installed on your phone or plugged directly into your car, and they’ll keep track of how hard you’re braking, if you’re speeding, and other driving behaviors that affect your likelihood of getting into an accident. If you’re a safe driver, you could save up to 25% on your premiums by proving it with a Telematics app. Ask your insurance provider if this is an option for you!

Armed with this advice, my cousin shopped around and ended up saving a bundle on his monthly insurance premiums. Use these 15 tips to lower your own car insurance and keep more of your money!

About the Author:

Bijan Abdi is the President and CEO of Freedom National Insurance Services, a managing general agent based in CA. He has over 30 years of experience in preferred, standard, and non-standard auto insurance. His background includes experience in sales, underwriting, program design and maintenance, as well as managerial and executive duties.
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