Auto Insurance: 6 Tips to Reduce Car Insurance Premium

Every driver who has driven a car knows how important and helpful car insurance is. But at the same time, they also get to know how expensive auto insurance can be when buying it. When something is essential, necessary, and costly, one should always try to find ways to save money.

It is shocking that while car insurance is such a ubiquitous thing, many people do not know how they can save money on car insurance premium rates. Regarding car insurance, you need to balance costs with coverage. This means that both low cost and great coverage are of equal importance. 

So are you among the ones paying a lot in car insurance premiums? Well, this article is for you. Here are some fantastic tips to help you reduce car insurance premium rates without compromising your coverage. Let’s get started. 

Compare and Select the Best

Before you take any steps to reduce your car insurance premium rates, you need to be in a suitable space. If you get a costly car insurance policy offering little coverage, you are overpaying for it. 

So the first thing to do here is to get the right policy. How to do that? By comparing all the different car insurance companies and what they are offering. Finding the best auto insurer is easier than you think. All you need to do is search for it specifically for your state. 

For example, if you live in Nevada, search for the best Nevada car insurance and compare their policies, coverage, reviews, features, and of course, the price. Make sure that price is not the only thing you are looking for since coverage quality is just as important. 

Once you have ensured that you got the best car insurance policy, we can move to fine-tuning to reduce your auto insurance premium rates. Let’s start with the fastest and most effective one. 

Insurance Deductibles

Almost every car insurance policy comes with a deductible. Insurance policies have a coverage limit, the maximum amount the insurer would pay when you claim the policy. 

But to avoid unnecessary claims, insurers set a deductible amount. This is a small amount of money (compared to the coverage limit) that the policyholder needs to pay before the rest of the coverage amount is produced by the insurer. 

So if you have a policy and claim it for car repairs that cost around $5,000, and the deductible is set to $1,000, you’ll have to pay this amount, and then the insurer would pay $4,000. 

You can reduce or increase the deductible amount directly affecting your insurance premium rates. If your deductibles are low (meaning you’ll pay less from your pocket in an insurance claim), your insurance premium rates will be high. 

It is a door that swings both ways. If your deductibles are high, your insurance premium rates will come down. But if you make an insurance claim, you’ll have to pay a lot from your pockets. 

You cannot claim your insurance if the cost of repairs is below your deductible amount. So increase your deductibles, and your premium rates will go down. But make sure you drive carefully as you’ll have to pay a lot if you get into an accident. 

Take Defensive Driving Course 

Many driving courses improve your standing with the insurer. Car insurance companies sometimes have their driving course if you want to qualify for discounts or low rates. 

Contact your insurer and ask if they have any course like this or if taking a defensive driving course would be accepted. If they do buy it, take the system, and you’ll get some sweet discounts on your insurance premium rates. 

Consider Pay-Per-Mile Insurance

If recently your driving has reduced, thanks to the pandemic, you can consider switching to pay-per-mile or usage-based insurance. Usage-based insurance can be much cheaper and better if your monthly mileage is low. 

If you drive occasionally and your monthly mileage is below 800 miles, then switch to usage-based car insurance (compare prices here as well and choose the most affordable one).

A base rate is first calculated by looking at your driving record and other factors. This base rate is multiplied by your monthly mileage to calculate your premium rates. The best thing is that if you do not drive that much, it can save hundreds of dollars in insurance bills. 

Clean Driving Record

If you want to save money on any auto insurance policy, having a clean driving record is imperative. A bad driving record with traffic violations, rash driving, etc., can hike your insurance rates and premium prices.

So avoid breaking traffic rules, drive under the speed limit, and avoid driving under the influence as it is one of the most impactful negative factors in your driving record. A clean driving record will keep your insurance premium rates low. 

Insurance Claims 

It might seem a little counterintuitive but making an insurance claim is only sometimes the smart move. For minor accidents that require minor repairs, it is better to pay from your own pockets than make an insurance claim. 

In case you want to make an insurance claim, you’ll have to pay the deductible first. An insurance claim will increase your car insurance rates in the future, no matter which insurer you choose. This increases your insurance premium rates too. 

So the best thing to do here (if you want to reduce car insurance premium rates) would be to avoid insurance claims when you can pay for the repairs yourself or get an accident forgiveness add-on so that your insurance rates stay low even after you get in an accident. 

Conclusion

With all these steps, your insurance premium rates will go down. Do note that if your rates are inflated due to poor driving records, or traffic violations/accidents, reducing the premium rates can be very difficult and time-consuming. 

The best option, in this case, would be to switch to a new company that offers the lowest prices. You’ll still pay a lot compared to others with good driving records, but at least it won’t be as expensive as it is now.