How to save money on auto insurance

ByDavidRodeck

Kiplinger’s Personal Finance

Shopping fornewauto insurance? Here areways tosavemoney.

Startbyaskingaboutdiscounts. Bundling multiple policies with one insurer can lead to savings on all your premiums. Discounts for setting up electronic payments, paying your entire premiumin full, and going several years without a ticket or accident are alsocommonones to look for, says Laura Longero, executive editor for CarInsurance. com. If you have a student in your familywho drives your vehicles, see whether he or she has the grades to qualify for a good student discount. Whenyour child goes to college, Longero says, insurers could reduce your premiums if the school is more than 100 miles away fromyourhome.

Or, if you’re driving less these days, see whether your insurer has a programthat sets your rate based on your mileage. More major insurers have created thesenew programs since the pandemic.

Considerincreasingyourdeductible orremovingcollisioncoverage. Ellen Edmonds, director of external communications forAAA, says that by increasing the deductible— what you pay out-of-pocket after an accident— you can reduce your premium. "Justmake sure you could cover the higher deductible," she says.

Youmayalsobeable totrimyourinsurancecost ifyouhaveanoldervehiclethat hasdepreciatedinvalue." You could reach a point where you’re spending more on full coverage than it’sworth for the vehicle," Longero says. "Consider switching to liability only." Just knowthat if you do crash, you’d need to cover the repairs on your vehicle yourself or buy a replacement.

Asyoushoppolicies, checkwhetheryour currentliabilitycoveragelimitshavekept upwithinflation." It’s incredible howfast the prices of cars have gone up," saysAdam Pichon, general manager of auto insurance at LexisNexis. "If you have $50,000 of property damage liability insurance, is that going to be enough? Aused F-150 might be more than $50,000 today. If you crash into one, you’d be on the hook for any uncovered damages."

Checkhowaninsurercomparesbeyond price. J.D. Power releases a study every year rating insurers on customer satisfaction for processing claims and repairs. TheNational Association of Insurance Commissioners scores insurers based on howmany customer complaints they receive.

Improveyourcredit. "Research suggests that peoplewhomanage their creditwell file fewer claims and are, therefore, less expensive to cover," Edmonds says. If your credit score isn’twhere you’d like it to be, make all of your loan and credit card payments on time and aim to pay down your credit card balances. This can help you save on premiums the next time you shop, not to mention help you get better loan and credit card rates in the future.

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