An estimated 12% of drivers in the U.S. lack auto insurance, and in some states, the number is even higher. For example, 29.4% of Mississippi drivers are without coverage. While driving uninsured is a dangerous financial practice, it’s easy to understand why so many drivers cross their fingers and hope for the best. Auto insurance is expensive, with rates increasing dramatically since the onset of the pandemic in 2020. Still, there are deals to be had — as long as you know where to look.
Take full advantage of auto discounts
The goal is to find the cheapest auto insurance with the highest level of coverage. However, prices can vary dramatically. For example, you could ask three companies about a specific discount and find out that each offers a very different percentage off. As you shop for auto insurance, it pays to keep a list of which discounts you qualify for and how big a break each company gives.
|
Discount |
How to qualify |
Estimated average savings |
|---|---|---|
|
Autopay |
Set up autopay so your premiums are automatically deducted from your bank account |
5% |
|
Good student |
Maintain a GPA of 3.0 or better |
5% – 25% |
|
Driver training |
Complete a driver training course |
5% – 7% |
|
Safe driver |
Have no accidents or tickets on your driving record for at least three years |
10% – 34% |
|
Anti-theft devices |
Buy a vehicle with devices designed to stop car thieves. This includes alarms, tracking systems, and kill switches |
5% – 25% |
|
Anti-lock brakes |
Drive a vehicle with anti-lock brakes to prevent skidding |
3% – 5% |
|
“Green” vehicle |
Choose a green or hybrid vehicle |
2% – 10% |
|
Affiliation |
Insurers sometimes offer a discount to employees of certain companies, college alumni from specific schools, and members of certain clubs |
10% – 25% |
|
Customer loyalty |
While shopping for new auto insurance every year or two is a good idea, if you remain with the same company for several years, you’re likely to score a discount |
6% – 11% |
|
Military |
Be an active or retired member of the military, or a close family member |
Varies, depending on whether you’re deployed or at home |
|
Senior |
Be over the age of 55 (however, some insurance companies begin to raise rates once a driver hits age 70) |
15% – 35% |
|
Usage |
Typically, insurers require a driver to drive less than 7,500 miles annually to receive this discount |
5% – 40% |
|
Paid-in-full |
Pay your premium in full at the beginning of your contract |
5% – 14% |
|
Paperless account |
Agree to receive all bills and communication from the insurer via email |
3% – 5% |
|
Student away from home |
Be under the age of 25 and a student living at least 100 miles from home |
10% – 18% |
|
Bundling |
Bundle your auto insurance with other coverage — like homeowners, boater’s insurance, or renter’s insurance — with the same insurer |
10% |
Data source: Author’s research.
Once you know which discounts a particular insurer offers, make sure the company knows that you qualify. If you have a teen driver in the family or a driver with a speeding ticket, it’s especially important to snag every discount available to your household.
You have other options
Discounts may be one of the easiest ways to lower your premiums, but they’re not the only way. Here are other options to remember:
Check out rates before purchasing your next vehicle
Some vehicles are simply more (or less) expensive to insure than others. Sometimes it’s due to safety ratings, although that’s not always the case. For example, the Honda Accord is one of the most stolen vehicles in the U.S., making it more expensive to insure than rarely stolen cars. Before you buy your next vehicle, shop around to learn how much it will cost to insure it.
Look into usage-based insurance
With usage-based coverage, an insurance company monitors your driving habits to determine how much you drive and how safely you drive. If you’re a safe driver who isn’t on the road much, you could save up to 40%.
Shop around
Loyalty is a good thing, but you’re not married to your insurance company. At least once a year, take a look at different insurers to learn how much you could save by switching.
Bottom line
Few people would describe shopping for auto insurance as “fun,” but it’s an important way to protect yourself financially. The main thing to keep in mind is that good deals do exist if you’re willing to dig for them.
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Amazing Deals That Lower Your Auto Insurance Rates was originally published by The Motley Fool
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.