There is no doubt that car insurance is expensive. According to Statista, in 2020, estimated annual car insurance rates were as low as $357/year in Iowa all the way up to $5,282/year in Michigan. That’s crazy! Also, Michigan is more than twice the 2nd highest state rate, Florida, at $2,565/year. We wonder what’s going on in Michigan. Hopefully, you don’t live there!
What is Auto Insurance? 🚘
Auto insurance, or simply car insurance, is protection that drivers usually have to have on their vehicles to protect them if they ever get into an accident. It is often legally required to have insurance when you drive, and it is meant to ease the financial burden related to costly car repairs. So since we all have to have it if we drive, let’s look at some of the best ways to save some sweet cash from the big car insurance companies.
1. Look For Discounts 💯
This might be the easiest way to lower your car insurance premiums. Many insurance companies have tons of different discounts that many people qualify for, but not many people realize they are eligible for them. It’s essential to do your research and look around to score the best deals. For example, GEICO offers a discount for students, multi-vehicle, multi-policy, employee affiliations, and even military. Check out GEICO’s discount list here. Other large insurance companies like State Farm offer similar discounts too! Be sure to search around and find the company that gives you the most considerable discount on your premium.
2. Raise Your Policy Deductible 📈
Most insurance policies come with a hefty fee in the fine print when making a claim. This fee, called a deductible, is paid by you out of your own pocket just to file an accident claim. Companies charge deductibles, so people don’t go on a rampage filing claims left and right. Deductibles are in place to make you think twice about filing, and you should. If you have to pay anywhere between $100-$2,000 every time you file a claim, you might look to just take the car to the nearest auto shop for repairs.
Raising your deductible is a great way to save on your monthly premium, but it’s essential to understand the changes that occur when the deductible is raised. The relationship between the monthly premium you pay and the deductible is opposite, meaning the deductible goes up, the monthly premium goes down, and vice versa. We put an infographic below to better visualize the relationship. If you decide to raise your deductible, it only helps you if you don’t get in an accident. So be sure to be the best driver you can be!
3. Shop Around 🛒
Shopping around for car insurance makes sense. It’s easy because all you have to do is call around the various insurance companies, ask for a quote, or call an insurance broker. Tell them you are looking to lower the price of what you pay for insurance and let them know what you are paying today. This will give the agent a better baseline for how you are as a driver.
Also, don’t be afraid to continually shop around. After every 3–6 months without an accident and a good driving record, try to pick up the phone to see if you can get a cheaper premium. The worst they can tell you is no, but the best-case scenario is that you get some more of those sweet, sweet Benjamins back into your pocket! 💸
4. Get Those Bundle Deals 📚
Most insurance companies give a multi-vehicle discount for having more than one car, truck, boat, and/camper on the same account. These companies also usually offer multi-policy discounts when you bundle property, business, or additional insurance policies like pet, life, or jewelry insurance. So don’t be afraid to bundle your policies in the name of saving money!
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