6 ways to reduce the cost of car insurance

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Have your car insurance costs increased this year? You are not the only one. According to recent data from ValuePenguin, insurance rates in the US are expected to increase by 8.4% in 2023. That would bring the average annual cost of auto insurance coverage to $1,780.

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Looking for ways to reduce your monthly bill? Here’s how experts say you can save money on your car insurance this year.

Ask your provider what discounts they offer

If you haven’t already, contact your current auto insurance agent and ask if they have any discounts that you’re not already taking advantage of.

“In some cases, you can stack these rebates for greater savings,” said David Cooley, insurance agent at COUNTRY Financial. “Taking a defensive driving course, having a good driving record, being a good student, or having a specific career could get more rebates and result in more savings.”

You may also be able to get discounts if you switch to paperless statements, use Auto-Pay, renew your plan early, or have low mileage on your vehicle.

Consider bundling your insurance

Many insurance companies offer discounts — often between 5% and 25% — for bundling. This can include insuring multiple cars or adding a home, rental, boat, motorcycle or life insurance policy with the same company, said PJ Miller, vice president and independent insurance agent at Wallace & Turner Insurance.

You may also find it more convenient to bundle your insurance together as you only get one monthly bill instead of multiple.

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Look for other providers

Using features like Auto-Pay or bundling your insurance can help you get discounts, but don’t let that stop you from browsing.

Switching to a cheaper provider can save you even more money in the long run. Be sure to work out the numbers for yourself (or ask your insurance agent for help) to see which company is offering you the best coverage at the lowest price.

Be aware that switching providers may not be the best move if you recently bought new auto insurance or if you have multiple claims with your current carrier, said Ben Guttman, a broker at North Central Insurance Agency.

Shopping in the area is unlikely to result in a good price result [in those instances],” he said. “But overall, yes — an independent agent does all the legwork with you with multiple carriers, saving you time and frustration.”

Maintain good credit

Did you know that your credit score can affect your car insurance rates?

“A good reputation with the credit bureaus can help keep your auto rates low,” Cooley said. “Pay your bills on time and check your credit history frequently to make sure it’s accurate.”

If you’re having trouble remembering your due dates or making your debt payments on time, automatic payments can help you stay consistent. Just make sure you have enough cash reserves in your bank account to avoid overdraft fees.

You can also get healthy credit by using 30% or less of your available credit, keeping your contact information up to date, and paying off your credit cards in full each month, or at least making the minimum monthly payments.

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Obey the driving rules and focus on safety

Obeying traffic laws and speed limits isn’t just a safety issue – it can also help you save money on your insurance.

“Speeding fines and other traffic offences [your car insurance rates] jump,” said Cooley.

According to ValuePenguin, a traffic violation or an accident can increase a person’s auto insurance rate by an average of 52%. And DUIs have the biggest impact, increasing rates by an average of 84% in the US

Try increasing your deductible or eliminating coverage

Increasing your deductible — the amount you pay out of pocket per claim — can help lower your monthly premium, Miller said. But remember that if you lose, you end up paying more out of pocket.

Another option is to eliminate the unneeded cover. For example, you may not need collision insurance if your car is old, Miller added. Because vehicles that are 10 or more years old usually lose significantly in value. Before you make a decision, however, make sure you would be comfortable if your car were totaled.

“While you may be trying to cut coverage or make changes to your deductible, talk to your insurance agent and make sure you fully understand the implications of these cost-saving changes,” Cooley said. “You could have long-term consequences if you suffer an accident or damage.”

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This article originally appeared on GOBankingRates.com: Saving Money in 2023: 6 Ways to Reduce Car Insurance Costs

Originally published March 24, 2023 at 12:00 am