Updated: Feb 12, 2019
Saving money on your auto insurance has been a hot issue lately-and for good reason-it's a big expense for many families.
There are many contributing factors when auto insurance rates are established, like the increasing cost of repairs, cars have more sensors and cameras than ever before, the cost of medical care for yourself or others is at an all-time high, recent natural disasters (hail, hurricanes, floods, and fires) have eaten away at reserves, and distracted driving has increased overall accident frequency and severity. Because insurance is shared risk, these increased costs get spread around to everybody.
Have you wondered what you can do to reduce your auto insurance premiums? Try these 7 things that can helps shave hundreds in premium every year.
1) Bundle. When you package your auto insurance with other policies like home/renters, life, & umbrella, you can usually take advantage of big savings opportunities. #bundle
2) Consolidate. If you have multiple vehicles insured on separate policies in the same household, you could be missing discounts. In many cases, packaging those vehicles into one policy can save money and time. #multiplevehiclediscout
3) Pay in Full. If you're in a financial position to do so, paying your premium 6 or 12 months in advance can usually lead to additional savings. How? Insurance companies invest your premium dollars to offset losses, and can typically generate more revenue by receiving your money sooner, and then pass those gains on to you. #savings
4) Staying safe. Insurance companies typically offer the most generous discounts for folks with few or no tickets or claims in the past 3-5 years. Insurance companies try to predict future risk, and they attempt to do so with information about your past. #slowdown
5) Maintaining good credit. Statistically speaking folks with good or excellent credit typically have fewer insurance claims. Not many people are sure why, but large data supports this. Since insurance companies try to predict future risk, they use many factors when determining rates. If your credit is less-than-perfect, you may want to work on improving it for a variety of reasons. This can help lower your insurance premium but also make it easier to qualify for a mortgage, and get lower rates for vehicle and personal loans. Insurance does not count as a hard hit on your credit, however so getting a quote does not lower your score. #credit
6) Increasing your deductible. If you're not one to file many claims, opting for a higher deductible may be a great option for you. Going from $500 to $1,000 can quickly save $50-$150/year on each car you own. You'll need to come up with more out of pocket in the event of a claim, but the immediate and long-term savings can offset that. #deductible
7) Usage-based insurance devices or "UBI". Many companies are now utilizing plug-in devices and apps on that run on your cell phone to monitor and help you track safe driving habits, in exchange for a discount on your auto insurance policy. These devices track miles driven, distracted driving, hard brakes, fast acceleration, and speed using features like GPS. The better your score, the more you save. This will only become more common in the future, in an attempt to better calculate your actual risk to the insurance company vs. putting you into a large pool of other drivers that share a similar age, gender, and zip code as you.
If you have questions, please reach out! I'm always happy to help folks like you optimize your pricing and discount opportunities.
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Agent & President
South Lake Agency, Inc