Day 8: Reduce Car Insurance Rates

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This post is part of the 31 Days to Radically Reduce Your Expenses series. Visit this page for even more ways to slash costs and eliminate unnecessary spending! 

Could you be paying too much for car insurance? These 7 ideas will help you get the BEST price possible!

If you’re a pretty safe driver, paying astronomically high insurance rates is almost offensive. Year after year of no accidents, no tickets, no catastrophes…for what….an extra $900 per year that you could really put towards something else?

Insurance companies bank on the what-if’s, and the fact that we really don’t know when or where “what” will happen. That’s why is super important to have good coverage despite the fact that you might not ever use it. {Not to mention it’s quite illegal if you don’t!}

But when it comes to shopping around for car insurance, let’s be honest — it can be a huge inconvenience to call around for quotes, compare coverage, and make sure you’re working with a company who has your best interests at heart. This is probably why most of us set up car insurance is a once-and-done kind of deal, but its not!

You need to continually review your policy to make sure you’re getting the best rates possible, and these 6 ideas are the perfect place to start.

How to Reduce Car Insurance Rates :

1. Bundle Your Policies – As we talked about with Home Insurance Policies, you can often save on rates if you bundle your car insurance with Liability, Home, Life, etc. But always crunch the numbers before you make the switch to see if this is truly worth it!

2. Pay Your Premium in Full – One of the easiest ways to save on car insurance is to pay your entire policy in full, which means annual payments instead of monthly ones. Insurance companies tack on extra fees for monthly payment plans, and you can avoid these entirely just by setting aside enough money each paycheck until your yearly bill comes due {aka budgeting}.

3. Take a Defensive Driving Course – Every few years, you are able to enroll in a driving course to help you waive a ticket, reduce points on your license, or get a car insurance discount. These courses generally last between 4-12 hours, and are sometimes offered through various local companies – if you work outside the home, check with your boss to see if one is available! Otherwise, visit this website to see what classes are being offered in your state.

4. Increase Your Deductible – A higher deductible does result in lower insurance rates, but it can also come to back to bite you if you get into a fender bender or more serious accident. Anyone who decides to go this route, should commit to driving like an absolute angel and establish a hefty emergency fund to cover all those what-if’s!

5. Don’t Carry Excess Coverage – Comb through your policy to make sure you’re not paying for more than you need. Drop rental reimbursement, towing assistance, or even comprehensive coverage {which covers acts of nature} to save a little extra. Some of these policies might be already covered by companies like AAA, and you certainly don’t want to double pay for the same service.

6. Take Advantage of Special Discounts – Discounts on car insurance rates abound — you just have to know where to look! Each company will usually list available discounts on their website, but be sure to ask just in case. You can receive employer discounts, good-credit discounts, association discounts, low-mileage, and more. You should be able to qualify for at least one!

7. Research the Competition – Car insurance companies are vying for your dollars, and offer all sorts of perks for switching over to them. We tried Snapshot by Progressive, but the device we had to place in our car was so sensitive, we didn’t qualify for a discount at all – and we are pretty safe drivers! I haven’t had a chance to experiment with Allstate’s safe driving rewards, so if anyone has any experience with them, please chime in with your thoughts in the comments!

Today’s Challenge:

If you haven’t compared insurance rates in a while, call around or get a quote online. It might be worth doing a little bit of extra research to see if you can shave a portion of  your payment! If you’re up for a bonus challenge, enroll in a defensive driving course to make the deal even sweeter. Share one idea you’re going to try this week in the comments below!

{Go to Day 9: Slash Your Grocery Bill}

If monthly payments are taking control of your budget, you don't want to miss this 31 Days Series to Radically Reduce Your Expenses.

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  1. Get your driving record from LexisNexis. I got mine after an honest insurance agent told me my driving record made lower rates impossible. Several inaccuracies appeared on my record, which resulted in higher rates for at least 4 years (I’d had 2 minor fender benders, so I assumed my higher rates resulted from those accidents–WRONG) . My current insurance company would not reimburse me for the overages after my driving record was corrected, so I switched companies and got a lower rate. All insurance brokers get your LexisNexis report when quoting auto rates; ask your agent what is showing on your record that may be hurting you. I had no idea this company existed until I couldn’t lower my rates.

    1. That’s a great tip, Virginia. It’s amazing how we can assume that the rate is correct only to find out that they have wrong information! I’m going to have to go check my driving record now.

  2. This tips are approved by an insurance agent- me! Hahah!

    I no longer work with AllState, but I did for 3 years. Their cash back incentive for no accidents actually raises your rates, so you’re paying extra to get your own money back. It’s better not to take it in my opinion.

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