How to Lower Your Auto Insurance Rates Fastest

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Given the speed at which auto insurance costs have increased, it’s natural to want to cut yours. Keep reading to find out how. [[{“value”:”

Did you know that an estimated 14% of all drivers in the U.S. do not carry auto insurance, and in some states, the statistics are far higher (we’re looking at you, Mississippi, Michigan, and Tennessee)? Given the rate at which auto insurance costs have increased since the beginning of the pandemic, it’s no surprise.

If you’re stuck with a rate that’s quickly draining your checking account, here are some tips for driving it down — fast.

Bundling coverage

Average savings: 10% to 14%

As mentioned, how much you pay for auto insurance depends, in part, on where you live. Some states are more expensive than others. If you live in one of the more expensive states, you’re not without hope. For example, bundling coverage can immediately save you 10% to 14%.

Say you have an auto insurance policy with Company A that costs $150 per month. However, your renters or homeowners insurance is with Company B. In addition, you have motorcycle coverage with Company C.

Bundling means having two or more policies with the same insurance company. For example, if you were to move your homeowners coverage over to Company A and bundle it with auto insurance, you would save $15 to $21 monthly or $180 to $210 per year.

You may be able to score an even bigger discount by moving your motorcycle coverage over to Company A as well.

Qualify for discounts

Average savings: 25% to 30%

Taking advantage of all available car insurance discounts is one of the easiest ways to save money on auto insurance. Most insurance companies offer an entire menu of discounts. They cover almost everything, from safe driver discounts to low-mileage discounts (a low-mileage discount applies to those who don’t spend much time on the road).

If you haven’t checked out your insurance company’s discounts lately, now would be a good time to do so. If you’re shopping for new coverage, make sure to compare the discounts you qualify for with each insurer before making a final decision.

Paid-in-full discount

Average discount: 9%

Are you aware that some insurance companies will give you a great discount just for paying your policy upfront? For example, if you receive a premium quote of $900 for a six-month policy, you could have $81 shaved off if you pay the entire premium at once rather than making payments.

Insurance companies save money when they don’t have to process regular premium payments, and this is their way of passing that savings along to you. Plus, when you pay upfront, there’s no concern that you might default on premium payments.

Go paperless

Average discount: 4%

You could save 4% at the snap of your fingers by letting your insurer know you want to go paperless. That means your insurance company will email you information about your account, premium notifications, and other correspondence instead of sending it by snail mail.

There are few easier ways to save money.

Increase your deductible

Average discount: 25% to 30%

A deductible is the amount of money you must pay if you make a claim. Let’s say you slide off the road in an ice storm, and it will cost $3,000 to repair your vehicle. If you carry a $1,000 deductible, you will pay the first $1,000, and the insurance company will pick up the rest. Your premium is based on how large (or small) your deductible is.

Typically, the lower your deductible, the higher your premium will be. The higher your deductible, the lower your premium will be. So, by raising your deductible to $1,500 or $2,000, you can expect your overall premium to drop by 25% to 30%.

Shop around

As loyal as you feel to your insurance agent or auto insurance company, you owe it to yourself to regularly shop around for new coverage. Just by making a switch, you could save hundreds of dollars per year without harming your credit score or getting hit with a penalty.

As you shop, make sure you’re looking at policies that provide you with coverage that is as good (or better) as the coverage you already have. Who knows, the best car insurance company for you may be right around the corner.

We’re all in a similar boat when it comes to auto insurance. No one wants to drive without it (and doing so is in fact illegal in most places), but we all face higher rates. Fortunately, there are things you can do to make your rates more affordable.

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