Current Date: 28 May, 2024

9 Ways to Reduce Your Auto Insurance Premium

Insurance dates back to the early civilization days, and several years later, it hasn't been washed down the drain. With industrialization and progressive civilization, there's been a need to increase Insurance packages by Insurance companies.

However, each type of insurance package has its Premium cost, which has scared many into opting for an Insurance package. This is why this article has looked into one insurance package - Auto Insurance, and how best to reduce its premium.

9 Ways to Reduce Your Auto Insurance Premium

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Who wouldn't want to reduce their spending? With auto insurance, savings are possible. To find ways to cut the fat, be willing to do some research, advises Pam Hansen Alfred, a State Farm agent in Great Falls. 

One of the best ways to lower auto insurance costs is to come clean about your driving history. Some other ways are described below.

Compare prices 

It pays to compare prices since they vary from business to business. Obtain a minimum of three price quotes. Direct phone calls to businesses are an option, as is online information. Comparisons of the costs charged by top insurers may also be available from your state's insurance department.

Insurance is something you purchase for financial security and mental comfort. Insurance is something you buy for financial safety and mental comfort, therefore, it's crucial to choose a financially sound business. 

Consumer magazines and rating services like Standard & Poor's and AM Best can be used to research the financial stability of insurance providers. Obtain quotes from various insurance providers. Many people sell by using their agents. 

The insurance company and these agencies share the same name. Some sell via independent brokers who provide policies from various insurance providers. Finally, some people use something other than agents. Instead, they conduct telephone or direct online sales to customers.

Don't just price shop. Obtain recommendations from friends and family. Ask your state's insurance department if they have data on customer complaints broken down by business. 

Choose a salesperson or customer service representative who is willing to answer all of your questions. Then, you can compare insurance quotes using the checklist on the back of this brochure.

Compare insurance rates before purchasing a vehicle


Examine insurance costs before purchasing a new or used car. The car insurance premiums impact the cost of repairs, the vehicle's overall safety record, and car theft.

As a result, many insurance companies offer discounts for features that lower the risk of theft or injury. In addition, you can obtain information from the Insurance Institute for Highway Safety to assist you in choosing a vehicle.

However, the insurance rates for fancier, more expensive, and gas-guzzler vehicles are typically higher.

Read Also: Top 10 Nigeria Insurance Companies

Demand for higher deductibles 

You must pay deductibles before your insurance policy begins to pay benefits. However, you can significantly reduce your costs by asking for higher deductibles. For instance, raising your deductible from $200 to $500 could result in a 15–30% cost reduction for collision and comprehensive coverage. 

Increasing your deductible to $1,000 can result in savings of 40% or more. However, ensure you have enough resources to cover a higher deductible before deciding. Hansen-Alfred advises raising your collision and comprehensive deductibles to lower your premium. 

By doing so, you increase your level of risk acceptance while decreasing your overall premium. She continues, "Raising your coverage to a $1,000 deductible is equivalent to having a savings account with $1,000 in it.

Going that route means ensuring you have enough money to cover the higher deductible if you get in an accident and need to file a claim."

Look for additional discounts 

Policyholders who have been in an accident- and moving-infraction-free for several years are eligible for discounts from the insurance companies. You might also receive a discount if you complete a defensive driving course.

You may also qualify for a discount rate if the policy includes the following:

  • An excellent young student driver who has completed a driver's education course 
  • A student is attending college without a car.

When making price comparisons, find out if there are any discounts available for the following:

  • Good Credit Record
  • Antitheft Devices
  • College Students away from Home
  • Drivers Ed Courses
  • Higher deductibles
  • Low Annual Mileage
  • Long-Time Customer
  • Defensive Driving Courses
  • More than one car
  • No Accidents in 3 Years
  • No Moving Violations in 3 Years
  • Student Drivers with Good Grades
  • Auto and Homeowners Coverage

The listed discounts might only be offered by some insurance companies or in some states. The final price, not the values, is the accurate savings measure. So even with limited deals, a business may still charge less overall.

Verify that you are receiving all the discounts for which you qualify.

Purchase your auto and home insurance from the same company

If you purchase insurance types, many insurers will give you a discount. You might also receive a discount if you have at least one vehicle insured with the same provider.

In addition, some insurers offer discounts to loyal customers. However, it still makes sense to compare shops! You might save money by comparing buying from different insurance companies to a multipolicy value.

Lessen Insurance for older vehicles 

Consider removing coinsurance and collision Insurance from older vehicles. Buying the coverage is not economical if your car is worth less than ten times the premium. You can learn the value of a car from auto dealers and banks. 

Alternatively, you can check Kelley's Blue Book online. Finally, review your coverage at renewal time to ensure your insurance requirements have stayed the same.

Maintain a clean credit history 

Having a solid credit record can help you save money on Insurance. The majority of insurers base auto insurance policy pricing on credit information. According to research, people who manage their credit well file fewer claims.

Pay your bills on time, don't take out more credit than you should, and keep your credit card balances as low as possible to protect your credit rating. Check your credit report frequently, and have any errors fixed right away to keep your record accurate.

Utilize discounts for low mileage

Some businesses give discounts to customers who drive fewer miles annually than the industry standard. Carpooling drivers may also qualify for low mileage discounts.

Inquire regarding group insurance

Drivers who obtain Insurance through a group plan from their employers, through professional, business, or alumni groups, or from other associations may be eligible for discounts from some insurance providers. 

If you need clarification on whether this is feasible, check with your employer and any organizations or clubs you belong.

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If you check out any of these suggestions, you can make the most of your auto Insurance premium. All the best!

Excellence Chukwuma Chukwunaedu

Excellence Chukwuma Chukwunaedu

I enjoy marketing, technology and business. I help businesses and brands connect with their ideal customer profiles and build products that excite them and solve their problems.