Auto insurance is a required purchase for drivers, both to comply with the law and to provide important financial protection. But since motorists must pay for this coverage year after year, it’s important to try to keep costs down without compromising essential coverage.
The good news is, there are five things drivers could do today that could potentially result in an immediate reduction in premium costs. Here’s what they are.
1. Increase your deductible
When buying auto insurance coverage, drivers have a choice of how large their deductible will be. The deductible is the amount the policyholder has to pay for covered repairs before the insurer picks up the difference. For example, if a driver has a $1,000 deductible and there is $5,000 in covered damage, the driver would pay $1,000 and the insurer would pay $4,000.
A higher deductible can result in lower premiums, although it means having to pay more in the event something goes wrong. For motorists with emergency savings who think the chances of a claim are slim in the immediate future, it can make sense to raise the deductible amount.
2. Drop unnecessary coverage
It’s important not to compromise on essential protections just to save money. No driver wants to end up paying a fortune out of pocket after a crash or other covered incident because they had too little insurance.
But, motorists also don’t want to pay for protections they do not need. For example, if a driver has AAA, then it would make little sense to pay extra premiums to get roadside assistance from a car insurer. Likewise, motorists with old cars that aren’t worth much may find paying for collision coverage isn’t worth the money.
Getting rid of unnecessary coverage can eliminate the premiums that were owed for that protection, providing immediate savings.
3. Bundle insurance policies
Insurers provide discounts for loyal customers. As a result, signing up for multiple policies with the same insurer can provide savings. This could mean insuring multiple cars with the same company, or even bundling other types of coverage such as renter or homeowners insurance along with auto coverage.
4. Reduce thousands driven
When a car isn’t driven as much, the chances of a motor vehicle accident declines. As a result, drivers should let their insurer know if they are driving fewer miles than in the past. By reducing miles driven and alerting the insurance company, motorists can lower their premiums.
This is especially relevant for the many people who have shifted to working remotely during the pandemic. Once a car is no longer used for commuting, it should be less expensive to buy insurance coverage for it.
5. Ask for discounts
Finally, many auto insurers provide several opportunities to save, including for those who complete a defensive driving course, for teens with good grades, or for people who work for specific companies. Setting up automatic payments or opting for paperless statements can also reduce premiums.
Drivers should ask insurers about any discounts they aren’t currently receiving to see if they can cut premiums. Asking for savings opportunities, combined with taking the other steps on this list, could make auto insurance coverage significantly cheaper. It’s worth taking these steps now to get immediate savings and reduce ongoing costs in the years to come.
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