Deductibles are what you pay before your insurance policy takes effect. By asking for higher deductibles, you can lower your costs. To reduce your car insurance rates, request quotes from several companies once a year. NerdWallet's car insurance comparison tool can also help you find the best deal.
Take our 3-minute quiz and talk to an advisor today. Founded in 1976, Bankrate has a long history of helping people make smart financial decisions. We've maintained this reputation for more than four decades by demystifying the financial decision-making process and giving people confidence in the actions they should take next. The average American spends about 2.6% of their annual income on auto insurance, which represents a significant bill for many households.
However, with the rise of remote working, many drivers' habits have changed, and so may other factors, such as the cost of car parts and repairs, that could affect the cost of their auto insurance policy. If you haven't compared rates or evaluated your coverage recently, you may be overpaying for car insurance. While reducing your monthly payment may seem complicated, Bankrate can help by offering you some simple tips to reduce your premium. For example, you might have only one car when you opened your policy and therefore included car rental reimbursement, but now you have two.
Periodically reviewing your car insurance policy can help you make sure that you're saving on car insurance, but it can also ensure that the coverage you select meets your current needs. Car insurance premiums are based in part on the price of the car, the cost of repair, your overall safety record, and the likelihood of theft. To participate, use an app or install a small device in your car that transmits data to the insurance company. Having adequate car insurance is smart and prudent, but it certainly increases driving costs.
Each of the auto insurance companies has their own methods for calculating rates, and your own individual rating factors play an important role, so you won't know how much car insurance can cost with other companies unless you request a quote. Collision insurance covers repairing damage to your car if it hits another vehicle or object, or if it flips over. While there's a long list of auto insurance providers that you can choose from to save money on car insurance, you can also do other things to make your car insurance more affordable. If you've had any major changes in your life, such as getting married, moving to a new location, or changing trips, you could review your car insurance policy to make sure it reflects your current lifestyle.
There are no guarantees, so do your homework and compare the costs to get a discount for several policies from a single insurer with buying your insurance separately from different companies. Companies base their rate on a variety of factors, from the type of car you drive to how long it's been insured. If you don't mind having your driving behavior recorded, consider purchasing usage-based or pay-per-mile insurance to reduce car insurance costs. Comprehensive insurance pays if your car is stolen or damaged by storms, acts of vandalism, or when hitting an animal, such as a deer.
Your state's insurance department or online consumer information sites can provide information about consumer complaints filed by the company to help you choose the right insurance company for your needs. Over time, with the depreciated value of the car, your annual premium could be higher than what the auto insurance company would pay if your car had been liquidated in full.