Car insurance is important to protect the drivers and passengers in your family. It can seem like you don't have control over the cost. The good news is there's steps you can take to lower auto insurance costs while still keeping everyone protected. By the way, that includes your teenage drivers too!
"In your majesty ride out victoriously for the cause of truth and meekness and righteousness; let your right hand teach you awesome deeds!" Psalm 45:4 ESV
Ways to Save on Auto Insurance as A Family
Keep a Clean Driving Record
Most insurance carries will reward you for being accident-free and staying away from speeding tickets. If a member of the family has a less than stellar record, there’s hope. Most providers look for a period of 2-3 years without incident to give this sort of discount. Check with your provider to see for sure. Once you know the target, set a reminder to contact the company again and make sure you get the savings.
Multi-Car and Vehicle Discounts
As a family, you probably have 2 or more vehicles or will at some point. Insurance providers will often give a discount for multiple auto policies bundled together compared to separate policies purchased from different companies. Most companies will price in this “bulk” discount automatically but don’t assume that. Be sure to make this known when getting a quote or checking rates.
Take A Defensive Driving Course
If you take a defensive driving course, there may be a discount in your future. You’ll need to confirm your insurer offers a discount for taking a class. It’s also important to find out what courses are approved by your insurance company. Most companies will direct you to a specific course provider our providers that qualify for the discount. Since most of these courses carry a fee, make the discount is worth the time and money to pay off.
Remember the Type of Vehicles in Your Family
This is a less applicable tip than some others, but still important to remember. All things being equal, some vehicles cost more than others to insure. While there’s many considerations when a buy a vehicle, don’t skip this one. Also, don’t buy a new car just for lower insurance rates. Do, however, make this part of the discussion the next time you’re shopping or trading a car.
Purposefully Choose a Deductible
Your deductible, the amount you pay before the insurance company covers a claim, affects the cost of your insurance premiums. A lower deductible tends to give you a higher ongoing cost for insurance and vice versa. If you choose to accept a higher deductible just be sure to have money available to cover an accident or claim. Your family’s emergency fund can help serve as a buffer for a possible claim.
Mind Your Credit Score
Credit scores don’t just affect the rates your family receives on loans. Your credit scores can also help or hurt your auto rates. You should keep for FICO score in good shape for many reasons. If you score has recently improved, it might be worth a call to your insurer to share this news. Also, some states ban credit information as a factor for auto rates.
Update Coverage as Your Vehicle “Matures”
Cars age and lose value over time. As your vehicle ages, consider updating coverage to reflect this reality. Comprehensive and collision are good options to look at dropping when your car is paid off and a few years old. Kelley Blue Book suggests you should drop comprehensive coverage when those premiums are more than 10 percent of the current value of your car.
Get Credit for Theft Deterring Upgrades
If you’re adding an alarm system or theft deterrent like LoJack, there could be a discount for you. Because these upgrades reduce the likelihood of a claim, insurance companies want to incentivize their use. There is a cost to install this sort of system so keep the cost/benefit trade off in mind.
Check for Affinity, Club, or Profession Discounts
Insurance companies have discounts that many families are eligible for and don’t use. If you’re a member of a club or association, check to see if they have a deal with an auto insurance provider. You might be surprised. Some professions also receive a discount with certain providers. Ask around at work or ask HR to see. Most insurers are not going to proactively ask so you’ll need to do some research.
Every 1-2 years, it’s a good idea to check and make sure your auto rates are still competitive. Most Americans don’t take this step, but it’s a good practice to get 3 or more quotes and see how your current provider stacks up.
A Word About Usage Based Discounts
One additional discount that has popped up in the last few years is commonly referred to as usage-based discounts. The idea is you allow the insurance company to track your driving habits with GPS. If you meet their criteria for safe driving based on your behavior, then you receive a discount. Is your privacy worth a discount? I don’t recommend this to anyone. Why? I haven’t seen enough from the providers who offer this to be confident about privacy protections. Privacy is touted as part of the agreement, but constant tracking of your family’s vehicles is a place to use caution.
If you have teenage drivers in the house, you know how they affect your family’s insurance costs. Younger drivers, considered a higher risk by insurers, mean higher premiums compared to a typical veteran driver. The biggest way to impact this cost for teen drivers is with a record of no speeding tickets, incidents, or accidents. It’s also possible to reduce rates with a defensive driving course. Lastly, just like for adults, be mindful about the impact of car choice on insurance rates.
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