How can we cut our auto insurance premiums in half? Here are a few tips to lower your car insurance rates.
Even if you already have insurance coverage, it’s still always a good idea to review your car insurance needs and compare rates from time to time, as even a cursory check of quotes from various sources on occasion can keep you proactive about some aspects of your finances. Comparison shopping is often the best way to find the best rates from any source. Here’s how I’ve checked and compared quotes using online insurance sites:
Cut Auto Insurance Premiums In Half: Shop Around!
So where can we get quotes? Here’s my list:
1. Esurance
My first stop was at Esurance, who has those eye-catching anime-style ads. Their focus has been on auto insurance, though they’re now covering other types of insurance products as well. I discovered that the company doesn’t serve certain parts of the country, but they’ll point you to someone who can (their affiliates) if they can’t help you. For those areas they do serve, you’ll get a quote in 6 minutes. They’ve received several honors for excellent web usability, web consumer experience, technical innovation, long term service and support, and corporate equality.
2. NetQuote
Another place I tried was NetQuote. This free service starts off asking for your zip code and the type of insurance you’re looking for, after which they ask you a series of questions. NetQuote sends your information to agents located closest to your zip code, while in turn sending you a list of these providers within minutes. You are then put in touch with these agents who can assist you via email, fax or phone. In addition to auto insurance, NetQuote can also provide you with home, health, and life insurance quotes.
3. InsureMe
I also took a look at InsureMe, which pools together a list of insurers who can provide quotes. This is an online insurance site on top of other online insurance sites that’s in the business of aggregating information across the insurance industry and helping you with quote and rate comparisons. For my needs, InsureMe has listed insurers such as Geico, Progressive, Liberty Mutual and others.
4. InsuranceAgents.com
Then there’s InsuranceAgents.com, which is yet another portal that allows you to retrieve and compare insurance quotes from a variety of insurance companies. They’re like a classifieds directory, since through them, you’ll be able to receive leads from agents offering various forms of insurance, beyond just auto insurance.
5. US Insurance Online
For another site that gives you many options, check out US Insurance Online. After filling up a form and supplying some general information about your vehicles, you’ll be sent free quotes that match your needs.
How To Lower Your Car Insurance Rates
Now that we’ve presented you with some leads on resources, how about taking a look at some general tips for lowering your auto insurance rates? What can you do to keep your rates low? In my case, as part of my plan to try to live on a leaner budget, I’ve decided to look into ways to try to economize on insurance. One thing I wouldn’t recommend is to skip on the insurance altogether, since your assets (home, investments, savings) can be placed at risk if you ever get into an accident where you incur a lot of damage.
Here are a few ideas for keeping your car insurance rates down:
1. Ask for a multiple car discount. Since we have more than one vehicle, this is something I can request from my insurer. In my neighborhood, boats are popular — can the insurer who takes care of your other insurance needs handle your cars as well? Talk to the agent who handles your home or renter’s insurance, too. They might be happy to give you a discount for the additional business.
2. Raise deductibles if it makes sense. The kind and amount of auto insurance coverage you want will affect your rates. With higher deductibles, I pay less in premiums, which I can put towards my savings instead.
3. Drop extra coverage that you can live without. If I wanted to, I could increase or decrease coverage depending on my situation. I’m reviewing to see how much collision, comprehensive and uninsured motorists’ coverage I should carry. I picked up these interesting suggestions from eHow that tell us when it may be acceptable to drop collision insurance:
- For cars that are 5 years or older.
- If the annual fee for the coverage is 10% or more of your vehicle’s value.
- If you no longer have an outstanding loan.
- If you are a safe driver.
- If you have enough money to cover repairs.
Since I drive an older vehicle, it doesn’t make sense for me to have top of the line coverage. With an older car, I aim to just bank the money I would have paid the insurance company for any extra coverage. If I lower my coverage limits, I can put the extra savings elsewhere and come out ahead.
4. Know your liability limits for your state. Weigh your risks for lowering your auto insurance coverage to the minimum required by your state. Your profession, assets, age and driving record can affect this decision.
5. Maintain good credit. If you’re shopping for car insurance, the car insurance quote services will most likely ask you to assess your credit rating — a sign that those with bad credit will earn higher quotes.
6. Maintain a good driving record. There are factors that can have a negative impact on your insurance rates, say if you’ve gotten tickets or been involved in accidents. By having a clean record, you’re premiums are kept favorable.
What else affects the rates? Do you carpool, share the vehicle with your spouse, let a teenager use your vehicle, or commute a long distance? Some questions asked by insurance quote services may refer to your use of anti-theft devices — if you have any, you’re bound to get better rates.
For more on how to keep your rates low, check out some of these dos and don’ts of dealing with auto insurance quotes.
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The first tip is key. Get all your insurance from the same place and you’ll get big discounts. Also make sure your quotes don’t include discounts that will expire. I had a great rate on my car but was never told it would expire after a year. Now I pay 25% more, which doesn’t include my jackass state’s recent required increase. But that is another story.
How about “doing away with the car and opting for mass transportation.” This was lifted from your Best Frugality Advice (April 3, 2007). If the transit system in your area offers monthly passes, get one because they are worth it. I saved more than fifty percent off my regular fare with a monthly pass. Plan your trips and check the route schedules which are available online. Better still, get copies of the transit schedules which are given out for free on the train or bus. Just spend a few minutes studying these schedules and you will discover that you can go practically any place worth going to using public transportation. If you need to walk from the stop to your destination, then by all means, WALK! It’s good exercise which your body needs. You can save a lot by just simplifying your life. I have.
Thanks Fischer,
I agree that mass transportation is a frugal option that we should all strongly consider. Personally, I live in the middle of nowhere (pretty much) and have no recourse but to own a car. I also don’t venture to places that have mass transportation either so I don’t have much of a choice.
Doing away with a car is a good thing if it’s feasible — but it’s not applicable for everyone; it’s just not practical or even doable. So this advice won’t apply to those who live in a bedroom community 2 hours away from the city (it’s likely that you can only use mass transportation for part of your commute, so you’ll still need your car around). But definitely, for those who live in more suburban, developed and urban areas with built-in bus and train routes, I would highly recommend public transportation for the frugal-minded.
Thank you SVB for your comments. Honestly, I was expecting a comment like yours. I agree we can’t totally do away with a car. In fact, I’ve a car myself which my wife uses more for stuff like taking the kids to school which is less than five minutes away, doing groceries, etc.
So how does this make my advice relevant? Your article is about cutting insurance premium costs. If I avail of mass transportation yet I still have a car, then am I not still paying the same insurance costs incurred by those who bring their car with them to work and everywhere else, right? WRONG! Or should I say, NOT NECESSARILY! My insurer charges lower premiums if you don’t actually use your vehicle beyond a certain radius from your home regularly. Stated otherwise, if you regularly use your car only say, within a 2 to 3 mile radius from your home (technically, from where it is regularly parked), you pay a lower rate as against another car whose owner uses it everyday to drive to work located 20 miles away from home.
In your case, I am pretty sure that from “in the middle of nowhere” where you live, there should be a mass transit terminal less than 5 miles away. So you can either ask your spouse to drive you to the terminal or you can park at the terminal and take the train or bus to work. So you incur less expenses for transportation and you get a reduced premium.
I hope this was helpful. Today, however, is Valentine’s Day. Happy Valentine’s Day to you. I am taking my family in our car, not mass transit, to the City and we are going to walk by the Bay. Then we are having lunch in a fancy but inexpensive (yes, you can find them fancy ones that don’t cost much) resto. This is a tradition in our family every Valentine’s Day.
Fischer,
Your thoughts are much appreciated, and are very helpful, indeed! We can all certainly make adjustments along the lines of what you said (and if we all did, we’d also be saving the environment!). In my case, I’ve truly cut down on transportation costs for the most part by quitting my job altogether and limiting my trips to within a few minutes of where I live.
Gosh, having had to commute 3 hours a day to the city and back took a toll beyond the gasoline costs, stratospheric parking fees, car wear and tear and what not. That lifestyle change in itself was worth thousands of dollars saved in health care costs (in my situation). So yes, making adjustments — big ones or not — can make a difference to the bottom line.
Thanks for your tips and suggestions! Enjoy the day with your family.
I once got a discount because of my career, I had to fax a copy of my diploma and they dropped my rates. You should ask around about professional discounts or discounts offered to organizations you belong to.
Did you mean “raise” your deductible? Normally if you raise your deductible from $250 to something like $1,000 it is much cheaper…
I think you meant lower your coverage limits. Then you can make it cheaper by raising your deductible. Sorry if I misunderstand what your trying to say.
Lee,
Yes you are right. Thanks for the correction — I’ve made the appropriate modification! Thank you so much for pointing out the stuff that needed clarification. I really appreciate it when a reader catches my goof
.
Age and gender play a role in insurance as well, though there’s not much you can do to change that. My insurance premiums dropped significantly when I turned 25.
I can certainly vouch for the bad credit affecting your premiums. Many years ago when I had terrible credit, the insurance company jacked my rate up by double what I was initially paying. Unfortunately, calling around to find lower rates turned out to be futile as my bad credit had everyone pretty much offering the same thing. Just one more reason to clean house and straighten out your finances.
One of the best ways to lower your car insurance rate is to turn 25. You tend to get what you pay for though, I was in several car accidents between the ages of 18 and 24. I haven’t had any since. I guess the insurance companies knew what they were doing.
I turn 25 in three days and am looking forward to the insurance break that is coming my way. I will be moving off my parents insurance bundle and onto my own. I should do pretty well being 25 with no accidents and a heated garage. Should be interesting, I will definitely be referencing those sites you mentioned. Thanks!
once got a discount because of my career, I had to fax a copy of my diploma and they dropped my rates. You should ask around about professional discounts or discounts offered to organizations you belong to.
I’m sorry, but I have to strongly disagree. I would never go with less than a $500,000 personal auto liability limit. This is for two reasons. First, if I do manage to do some serious damage to someone, I want it covered. It’s unlikely, but I see the claims and I know it happens, and sometimes the wrong person is held at fault. But way, way, way bigger is, you can’t buy more uninsured motorists coverage than you buy in liability. Keep in mind that UNinsured motorists coverage usually includes UNDERinsured motorists coverage. If you are the innocent bystander in an accident and you get hit by some bozo with no insurance, or some fool with minimum limits, you will deeply regret not having purchased more coverage.
You can depend on your medical insurance (assuming you have some) to pay medical expenses, subject to the usual deductibles and co-pays, but your medical insurance is not going to cover your pain and suffering, or expenses if you were hurt badly enough to need to modify your home. Your medical insurance is not going to pay your lost wages while you are out of work.
Yes, I work in insurance, but I make no money at all from personal insurance. Fortunately, I do not speak from my own experience, but from that of others including one man who was T-boned in an intersection by a little old man who had a little old policy with minimum limits – $10,000 per person/$20,000 per accident. As you can well imagine, the $10,000 this man got from the little old man barely covered the surgeon’s fee for the neck operation that was eventually necessary.
I understand the need to save money these days, but I don’t think skimping on insurance is the way to go. Just think about how many other people are making that decision, or how many people are going bare.
Let your car insurance company know if you have an excellent credit rating.
Often times they will use this as leverage for raising your rates, even if your credit rating is excellent. If they know that you are aware of your exact credit rating, they are less likely to try this.
See, Top-10 Car Insurance Ratings at Product Review Ratings, if you are shopping for the first time or looking for a new provider. Interesting list.
Two out of ten drivers in the State of Texas do not have car insurance coverage. Imagine how it will be if you happen to be one of those conscientious drivers who gets his or her car hit by one of these irresponsible drivers. You would be considered fortunate if you got out of it unscathed. But what if there were serious bodily injuries and considerable damages to your property? Would it not be reassuring if the other party involved in the car crash be able to pay you back? But the unfortunate fact is that car insurance laws are still ignored. It is for this reason that the Lone Star State has devised laws to punish offenders severely.
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Karen Walter
Thanks for help, I recommend your site to friends often…no one told me about raising my deductible would save me so much money. Thanks!
Excellent coverage of insurance needs. Multi-car discounts can be a major savings.
You’re insights regarding this topic are right on. There are a handful of websites and companies that provide accurate quotes to individuals who want to save money on their auto insurance premiums. Keep up the great work educating consumers with tips on how to save money!
I run an insurance business from a home office and was able to ditch the car for a year now. Between insurance savings, gas, and maintenance, it is a big financial boost. Also makes you realize what your priorities in life are. Sometimes, visiting distant places at the drop of the hat is one of them. I miss that. Katty
Having followed many of these tips (particularly the multiple car method) when getting car insurance, I’ll tell everyone reading this one thing — they work! Car insurance is an expensive thing, but there are ways to save. Take advantage of them.
If you are concerned with changing your insurance company, you could always shop around and then ask you agent to match the price.
I like what the first commentator (The Weakonomist said). I purchased insurance from the same company (home, life, car) and save lots of money in turn. It also makes managing things much easier. You’re dealing with one company, instead of 3 or 4.
Buying car insurance isn’t the same for everyone. While you do offer some good general guidelines each person will have different financial needs and should not be given strict cookie cutter coverage.
Another way you can reduce auto insurance rates is by taking traffic school online or defensive driving online. I just took one at a traffic school and my points dropped by two.
NetQuote is really good choice for insurance!