Auto Insurance / 10 Tips On How To Lower Car Insurance Rates In 2019
For the past few years, car insurance premiums have been steadily rising, and this trend is projected to continue in 2019.
According to J.D. Power’s 2017 U.S. Auto Insurance Study, the number of consumers receiving an annual rate rise of more than $200 per vehicle has more than doubled in the last four years.
Why is car insurance is so expensive?
A number of reasons have contributed to the rise in rates. People are driving more, which means more accidents, which means more expenses for insurance firms, which are then passed on to you in the form of rate hikes. In addition, repair and medical costs are rising, making accidents more expensive in general. Take into account the following:
According to the National Safety Council’s annual study, “Injury Facts,” the percentage of car crashes classed as “one vehicle colliding with another” increased to 73 percent in 2014, a 20-year high. As a result, if there are more accidents, there will be more claims. In 2017, 22.2 percent of households, up from 20.5 percent in 2014, submitted at least one motor insurance claim, according to Nielsen. It anticipates that by 2022, the number will have risen to 22.5 percent. As a result of the increased number of accident claims, insurers’ expenses rise, and some of that cost is passed on to you in the form of higher total premiums.
Repair expenses are on the rise: Most new-model automobiles now come standard with high-tech headlamps and safety features like lane-departure alarms and parking sensors. They may save lives and prevent injuries, but when accidents do occur, these contemporary technologies are more expensive to fix. According to State Farm, the cost of body work has risen over 40% faster than average inflation since 2005, while the amount of collision claims increased 8.2 percent from 2014 to 2016. Again, this suggests that insurance costs will rise in general in 2019.
10 tips on how to lower car insurance costs
Despite this alarming trend, you may save money on vehicle insurance in 2019 if you follow Insurance.com Consumer Analyst Penny Gusner’s recommendations on how to save money on car insurance.
1. Maximize your auto insurance discounts
Car insurance discounts vary per business, but the most common ones are for safety features, low mileage, having multiple cars covered with the same company, and staying with the same insurance provider for a long time. Here are a few of the most prevalent, and our “Guide to auto insurance discounts” delves deeper into the subject, with examples of how much you can save and how the discounts are applied to your policy.
Low-mileage discounts: If you drive less than 7,500 miles per year, you may be eligible for a 5 to 15% discount on your auto insurance. Additionally, if you take public transportation during the week, several vehicle insurance providers may give you a commuter discount.
Multi-car: You get a multi-car discount if you insure more than one automobile on your policy. Expect to save 10% to 25% on your collision, comprehensive, and liability insurance.
Anti-lock brakes, automated seat belts, and airbags are among the safety features that car insurance companies offer discounts for. Anti-theft equipment, such as car alarms and tracking systems (such as LoJack), may also qualify you for a discount on your insurance because they minimize the likelihood of your car being stolen or vandalized. These types of discounts might range from 5% to 30% off.
Also worth noting: Affiliate group memberships, such as being a AAA member or purchasing through a college alumni organization, or remaining with the same auto insurance company for a period of years, can help you save money.
2. Take a defensive driving course
Insurers often offer a 5% to 15% discount on liability and collision coverages for three years if you have a clean driving record and want to take a traffic class to receive a lower auto insurance cost.
However, depending on your state’s regulations and insurance carrier, there may be certain restrictions. For instance, only drivers over the age of 25 may be eligible for the discount, or all drivers of the insured vehicle may be required to complete the course in order to qualify.
Courses range in length from four to six hours, are available in person, online, or both, and cost between $25 and $75. They cover a variety of traffic safety training.
In most circumstances, taking a driver safety course will either eliminate minor offenses from your record or provide you with a discount, but not both.
One exception is New York City. By taking a DMV-approved accident-prevention course, drivers in the Empire State can reduce their violation point total by up to 4 points and save 10% on auto liability and comprehensive insurance. In New York, points can only be decreased once every 18 months.
3. Increase your deductible
According to the Insurance Information Institute, upping your deductible from $200 to $500 can result in a 15- to 30-percent premium reduction, while raising it to $1,000 can result in a 40-percent price reduction. However, keep in mind that this usually only applies to the comprehensive and collision components of your policy, not the base cost you pay for the whole thing. Also, the amount of money you save by raising your deductibles varies greatly based on where you live, the cost of your coverage after any additional reductions, your driving record, and the cost of repairing or replacing your automobile, so keep that in mind if you decide to go this route.
4. Keep an eye on your credit report
Most vehicle insurance companies include your credit history as one of many “risk variables” when determining rates (in jurisdictions where it is legal). Your auto and home insurance rates will be significantly reduced if you pay your bills on time and have a good credit history. Quadrant Information Services was hired by Insurance.com to compare full-coverage rates for drivers with good credit, fair credit, and poor credit. The average difference in rates between good and fair credit was 17 percent nationwide. There was a 67 percent difference between drivers with strong credit and those with bad credit.
Don’t give up if you have bad credit. In our “Car insurance guide for bad credit,” you’ll find advice on how to improve your credit and save money on auto insurance.
5. Drive safely
If you don’t have any accidents or traffic violations for a certain amount of time (typically three years, although some companies will go back five years), you may be eligible for a discount on your auto insurance coverage. Depending on how fast you were travelling, the speed limit, and your state rules, even a single speeding ticket can raise your vehicle insurance rates by 11 to 13 percent.
6. Buy a safe car
For the purposes of auto insurance, cars are graded on a risk scale. In general, the fewer accident claims filed for a specific car model, the lower the insurance rate will be. The safety elements are also taken into account by insurance firms. Visit the Insurance Institute for Highway Safety Vehicle Safety Ratings page to learn more about how well vehicles protect occupants in crashes and what crash-avoidance safety systems they have.
7. Bundle with home insurance
Insurance companies consider married drivers and homeowners to be lower risk, which means they submit less claims, but you may save even more by obtaining your house and auto insurance plans from the same company.
The nationwide average vehicle insurance discount granted for bundling home and auto insurance is 8%, according to data obtained for Insurance.com by Quadrant Information Services. A discount is also applied when renters and car insurance are combined, with the national average being roughly 5%. Bundling homeowners insurance saves you 20% on average throughout the country.
8. Pay-in-full discount
You normally get a 5% to 10% discount if you pay your auto insurance premium in whole and on time before the policy’s effective date.
9. Drop comprehensive and collision if you don’t need it
Collision and comprehensive coverage are available as add-ons. If you don’t own a new automobile, collision and comprehensive coverage may not be necessary. Comprehensive coverage compensates for damage caused by fire, flooding, animal strikes, and hail. You don’t need these coverages if your car is more than ten years old or valued less than $3,000. According to the Insurance Information Institute, collision insurance costs an average of $488 per year, while comprehensive insurance costs an average of $172 per year.
10. Shop around by comparing car insurance quotes online
Because no two vehicle insurance companies charge the same amount for a coverage, shopping around for the best prices pays you. Because each auto insurer has its own rate-setting mechanism, the cost of car insurance might vary by hundreds of dollars. Because your current insurance may evaluate life changes and accidents differently, you might be able to get a lower rate with another carrier. That’s why it’s crucial to shop for auto insurance quotes at least 45 days before your existing policy expires, as well as at the following times:
You married and relocated.
You had a mishap.
You purchased a vehicle.
You’re going to have a teen driver in the house.
You should always receive at least three quotations and make sure they are all for the same level of coverage. You should also consider the customer service ratings of the companies you’re investigating.
Which auto insurance company has the best rates?
What you spend for vehicle insurance will vary depending on your circumstances, but the chart below shows what you can anticipate to pay for full coverage from major carriers in your state.