Saving Money in 2023: 6 Ways To Cut Car Insurance Costs
Did your car insurance costs go up this year? You’re not the only one. Insurance rates in the U.S. are forecasted to rise by 8.4% in 2023, according to recent data from ValuePenguin. That would bring the average annual cost for car insurance coverage to $1,780.
Looking for ways to cut back on your monthly bill? Here’s how to save money on your car insurance this year, according to the experts.
Ask Your Provider What Discounts They Offer
If you haven’t already, reach out to your current car insurance agent and ask them if they have any discounts you’re not taking advantage of yet.
“In some cases, you can stack those discounts for greater savings,” said David Cooley, an insurance agent at COUNTRY Financial. “Taking a defensive driving class, keeping a good driving record, being a good student or having a certain career could layer more discounts and add up to more savings.”
You may also be able to get discounts for switching to paperless statements, using auto-pay, renewing your plan early or having low mileage on your vehicle.
Consider Bundling Your Insurance
Many insurance companies offer discounts — often between 5% and 25% — for bundling. This can involve insuring multiple cars or adding a policy for home, renters, boat, motorcycle or life insurance with the same company, said P.J. Miller, vice president and independent insurance agent at Wallace & Turner Insurance.
You may also find bundling your insurance more convenient since you’ll get only one monthly bill instead of multiple.
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Shop Around for Other Providers
Using features like auto-pay or bundling your insurance may help get you discounts, but don’t let them keep you from shopping around.
You may still save more money in the long run by switching to a less expensive provider. Be sure to crunch the numbers for yourself (or ask your insurance agent for help) to see which company will get you the best coverage at the lowest price.
Just be aware that switching providers may not be the best move if you’ve recently signed up for a new car insurance policy or if you have multiple claims with your current carrier, said Ben Guttman, a broker at North Central Insurance Agency.
Shopping around is “unlikely to have a good pricing outcome [in those instances],” he said. “Overall, though, yes — an independent agent will do all the groundwork with you with multiple carriers, saving you time and frustration.”
Maintain a Good Credit Score
Did you know your credit score can impact your car insurance rates?
“Staying in good standing with the credit agencies can help your auto rates stay low,” said Cooley. “Pay your bills on time and check your credit history often to make sure it’s correct.”
If you struggle with remembering your bill due dates or making your debt payments on time, automatic payments may help you stay consistent. Just make sure you have enough cash reserves in your bank account to avoid overdraft fees.
You can also maintain healthy credit by using 30% or less of your available credit, keeping your contact information up to date, and paying off your credit cards in full each month or at least making the minimum monthly payments.
Follow Driving Regulations and Focus on Safety
Following traffic laws and speed limits isn’t just a safety issue — it can also help you save money on your insurance.
“Speeding tickets and other traffic offenses can make [your car insurance rates] jump,” said Cooley.
In fact, getting a traffic violation or being in an accident can increase a person’s car insurance rate by an average of 52%, according to ValuePenguin. And DUIs have the biggest impact, raising rates by an average of 84% across the U.S.
Look Into Raising Your Deductible or Eliminating Coverage
Increasing your deductible — the amount you pay out of pocket per claim — may help lower your monthly premium, said Miller. But bear in mind that if you have a loss, you’ll end up paying more out of pocket.
Another option is eliminating coverage you don’t need. For example, you might not need collision coverage if your car is old, added Miller. After all, vehicles that are 10 or more years old tend to drop significantly in value. Before making a decision, though, make sure you would feel comfortable paying out of pocket if your car were totaled.
“While you may explore trimming coverages or making changes to your deductible, talk with your insurance agent and make sure you completely understand the impact of those cost-saving changes,” Cooley said. “They could have long-term consequences if you have an accident or claim.”
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