Drivers are not allowed to get behind the wheel without auto insurance, as each state sets its own minimum requirements. These coverage amounts are usually quite low—perhaps too low to cover the full cost of serious accidents—but they can still cost drivers hundreds of dollars a year.
This is a challenge for those who are already struggling with car insurance premiums that have risen dramatically in recent years. But settling for low coverage amounts is not the only way for drivers to keep costs under control.
Here are some additional strategies that could help drivers get the insurance coverage they want at a price they can afford.
Compare car insurance
The best way to find cheap car insurance is to shop around. Each company has its own formula for assessing risk and setting premiums, so the only way to find out which insurer will give a particular person the best deal is to get quotes. Most companies have online quotes, so it only takes a few minutes.
Drivers can save time by gathering important information before getting a quote, such as their driver’s license number, vehicle identification number (VIN), and the dates of any accidents or traffic violations that have occurred in the past three to five years. Most insurers will ask for this information, and some may also ask for social security numbers to provide a more accurate quote.
It’s best to compare three to five top companies before deciding on a policy. It’s often possible to save a quote so drivers can come back without having to re-enter their details.
When comparing options, don’t just focus on the premium. Also look at the coverage options available, the insurer’s credit ratings, and its customer service and claim satisfaction ratings. By reading car insurance reviews, drivers can identify important strengths and weaknesses in these areas.
Check out all available discounts
To be clear, more discounts on car insurance don’t necessarily translate to lower premiums. But they can help. Most car insurance companies automatically give drivers discounts on their premiums when they quote, but there are some ways drivers can maximize their savings.
First, they can be strategic about which companies they apply to. This is especially helpful for drivers who qualify for special savings. For example, some companies offer savings to drivers of hybrid or electric vehicles, while others don’t. Some companies also offer discounts to military members or veterans.
By seeking out these savings, eligible drivers may be able to reduce their premiums more than by working with an insurer that does not offer these discounts.
Drivers should also consider participating in a telematics program if they feel comfortable doing so. These programs typically come with a mobile app or small device that monitors the driver’s behavior behind the wheel, focusing on things like acceleration and braking speed and the time the driver spends on the road. They are becoming increasingly popular because they provide a more accurate representation of a driver’s risk tolerance.
Insurers cannot force drivers to participate in these programs, so they try to encourage participation by offering an upfront discount. Those who demonstrate consistently safe driving behavior may be eligible for additional discounts later.
Increase the deductible
Increasing a car insurance policy’s deductible reduces premiums, sometimes significantly. According to the Insurance Information Institute (III), increasing the deductible from $200 to $500 could reduce the cost of comprehensive coverage by 15 to 30 percent. And a $1,000 deductible could save the driver 40 percent or more.
The downside is that drivers will have to pay higher costs out of pocket in the event of a claim, but this may not be a problem if they can set aside the excess in an emergency fund.
Budget is a limiting factor for most drivers when purchasing car insurance, but if possible, it’s best to purchase more than the minimum coverage to reduce the risk of being held liable for serious damages that exceed the insured amount.
If the tips listed here don’t provide the protection you need, buy as much as you can now and look for new protection every six months or so to see if cheaper options are available.
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