Question:
What is the single best thing I can do to save on car
insurance?
Answer:
The single best thing you can do to save money on auto insurance is
to
shop around
. You may be content with your current auto insurance
company, but if you never check out rates with other car insurance
providers, you'll never know if you're overpaying -- and certainly
won't be able to save. (See "
12 ways to double-check your savings
")
If your
rating factors
haven't changed, you may think that car insurance offerings and
rates haven't either. But, that's not true. Car
insurance companies' rating systems may have adjusted downwards, or
new carriers with cheaper rates may have entered your
area.
Shopping around has the potential to save you hundreds, if not
thousands, of dollars on your car insurance policy. (See "
Pocket $1,102 just by shopping around
.")
Comparison shopping is the biggest way that you can save quickly
(it takes 15 minutes or less to shop online and receive multiple
rate quotes) on auto insurance, but it's not the only way to obtain
cheaper annual auto premiums. Here are other ways in which
you may also save:
Ask for discounts
. Whether you find a new auto insurer or stay with your
current company, you can always ask what discounts are
offered. If you're eligible for discounts that you aren't
currently receiving, let your car insurance company know so that it
can be factored in and reduce your rates. (Get an idea of what's
available in "Your guide to car insurance discounts.")
Try out a pay-as-you-drive (PAYD) plan
. By letting a car insurance company monitor your behavior as
a driver through a telematics device plugged into your vehicle, you
have the potential to save big. Progressive is offering a
test-drive of its "Snapshot" program if you want to see what your
possible savings could be before committing to a PAYD plan.
(See "Plug in, drive less, save more.")
Raise your deductible.
The less your car insurance company's financial obligation
is, the less you will pay for coverage. So, by raising your
comprehensive and collision deductibles you may save a few hundred
dollars a year. Be careful not to raise them to an amount you
can't afford. (See "Will higher deductibles save you
money?")
Drop comprehensive and collision.
If you own your car outright and it's so old that you
wouldn't pay for extensive repairs, then usually it's time to stop
carrying "full coverage" and instead save that money toward a new
car. (See "Is it time to drop comp and collision?")
Take a driver improvement course
. Many states mandate that auto insurers offer a discount if
you're a mature driver and take an accident-prevention
course. Some car insurance carriers will reduce rates for
young drivers or drivers of any age for voluntarily completing a
defensive driving class. (See "Defensive driving and driver
training discounts.")
Tell your insurer about personal changes
. Not only are you required to inform your car insurance
company about changes to vehicles and drivers, but your changes
could save you money if they lower your risk as a driver. For
instance, if you got married, drive less, have a child away at
college, or are moving to a different ZIP code, then your rates
could change - for the better.