5 Ways to Save on Car Insurance

Alicia Nelson-Bell, HUD-Certified Housing Counselor
Empowering Financial Wellness Program Coordinator

Unless you’re joining us from New Hampshire or Virginia, car insurance is one of those necessary expenses that is actually illegal to go without. It’s one of those things that many people hate to pay for but are glad to have it when they need to use it. Believe it or not, there are many things causing car insurance rates to be on the rise right now (not just inflation), some that are in your control and some that are out of your control. With these thoughts in mind, more people than before wonder how they can have the required insurance while cutting back on the cost. Lucky for you, we are sharing 5 of our favorite tips to help mitigate the cost of auto insurance premiums.

1. Increase your deductible: The lower your deductible is (your portion to pay when making a claim, i.e. $500), the higher your premium will be. Consider raising your deductible to $1,000, but make sure to have this amount saved up in a named savings account. You'll be prepared in the event you need to make a claim and you won't need to charge a credit card. Consider using a tax refund or work bonus to jumpstart this fund and/or setting up automatic monthly deposits into the "Auto Insurance Deductible" savings account. 
   
2. Shop around at least annually: Just like rates of other goods and services, auto insurance rates change (and negative events on your driving record get further in the past). Ask your agent to compare rates with any other companies they work with, or make some phone calls to other agencies to get quotes and make sure that you are getting the best rate for the coverage you have. Worst that can happen is that you find out that you already have the best rate out there!
   
3. Improve your credit score: This is another area where your credit score has an affect on your financial life, not just when taking on new credit. Insurance agents and companies will see that the more responsible you are in one area of your life, such as finances, the more responsible you are likely to be in other areas, such as driving. 
   
4. Research/Ask about discounts: There are lots of discounts available out there, large and small.  See if signing up for e-bills gives you a small discount. There are also discounts for military, good students, safe drivers, eco friendly drivers and bundlers just to name a few. You may benefit financially from implementing a revolving savings account to save monthly for your insurance premium and then be able to pay it on an annual basis and avoid monthly processing fees. 
   
5. Review your coverage: Often, there are small additional coverages that companies throw onto policies beyond required minimums, that you may not actually need. One example is rental car coverage. If your household has more than one vehicle, you may be able to do away with this added coverage and save a little money. Roadside assistance is another service you may be willing to go without. 
   

These are just a few simple ways to save on your auto insurance. We would love to hear what you are doing to save money on your car insurance premiums!