Car insurance is one of those things that people sometimes complain about paying for – until they actually need to use it. Those complaints likely got louder in quite a few households over the past several months because recent data shows that car insurance premiums have risen about 6.6% from year to year. That’s a big hike compared to the annual inflation rate, which is about 1%.
Even though prices have been rising steadily for the past few years, this is the first time drivers have been this vocal about it. In the most recent industrywide car insurance customer satisfaction survey, overall satisfaction with insurers dropped by seven points. This “significant” drop was in large part due to unhappiness over pricing.
It can be easy to figure out how to save on many expenses – your grocery bill, your cable bill, your cell phone bill, etc. Car insurance, however, oftentimes takes a little more planning. It can be tempting to just cut your coverage – after all, you still have insurance, so what’s the big deal if you get rid of this option here or reduce your limit there?
The truth is that it can be a huge deal if you’re ever in a car accident. It can mean the difference between having enough money to pay for medical expenses or not. It can mean the difference between having enough money to make up for lost wages or not. It can mean the difference between not having to worry about the financial concerns caused by your accident and spending time wondering where you’re going to find the money to pay for even basic expenses.
The good news is that there are ways to save on car insurance without sacrificing great coverage, and we have gathered them for you below.
Shop Around – There’s no rule that says you can’t talk to different insurance companies about their rates. Just as you’d get a few quotes for replacing your roof, we recommend getting several quotes for your car insurance policy. NOTE: Make sure you’re getting the right coverage when you request your quote. Here's what we recommend.
Ask About Discounts – It’s that simple, just ask. There may be discounts for being a good driver, being a good student, belonging to certain business groups, and more.
Consolidate to One Insurance Provider – Moving all of your policies to one company may qualify you for multi-policy discounts. If you already have several policies with the same provider (like car and homeowner’s), check to see if a discount has been applied to your premiums.
Think About a Higher Deductible – If you’re going to alter any part of your policy, this is the area to consider. Raising your deductible can lower your monthly payment, but keep in mind that it could cost you more in the event of an accident. For example, if your deductible is $500 and your car sustains $3,000 worth of damage in an accident, you’d only owe $500 before the insurance company covers the rest. If your deductible is $1,000, you’d owe $1,000.
Look Into Safety Features – If you’re buying a new car, definitely ask about all available safety features. Your insurance company will take them into consideration when calculating your rates.
Maintain Good Credit – Insurance companies use your credit score when they determine the cost of your policies. The better your credit, the better price you’ll receive on your premium.
No matter how you decide to save money, there are a few types of coverage we recommend you NEVER cut corners on. These will ensure that you have adequate coverage in the event of an accident.
One of these is Uninsured and Underinsured Motorist coverage (UM/UIM). Can you imagine being in a car accident that isn’t your fault only to find out that the other driver doesn’t have any or enough insurance to pay for your medical expenses or damage to your car? UM/UIM protects you if this ever happens.
You can also look into stacking, which multiplies the limits of your UM/UIM coverage by the number of vehicles you have on the same policy. Essentially, if you have two cars on the same policy, your UM/UIM limits would double if you elect to stack your coverage (and it’s very inexpensive).
The other coverage you should never skimp on is your tort option. When you construct your policy, you can decide between limited tort and full tort. We recommend that you always select full tort. Selecting full tort gives you the right to sue for pain and suffering in the event of an accident. If you select limited tort, you forfeit that right.
Check out our full list of recommended coverages and work with your agent to make sure all of your bases are covered.
Even though car insurance is in place to help drivers, the opposite can feel true if you’re injured in a car accident. In that instance, insurance companies can seem intent on doing the exact opposite of what they’re designed for by denying rightful claims. If you’ve been injured in a car accident and have a legal question, feel free to get in touch with us. We’re here to handle the insurance claims process for you so you can focus on getting better.