Here’s how to lower your car insurance premium in 2024

As we’ve seen over the past couple of years, one of the biggest drivers of inflation has been car insurance – with car insurance premium costs over 20% last year alone. Over five years, rates have increased 88% in Florida and 50% in New York, Nevada and Colorado, to name a few examples. Insurance now costs the typical car owner $212 a month, or $2,545 a year, according to Bankrate. Part of this is due to factors consumers can’t necessarily control, such as the high cost of crash repairs involving modern driver assistance technology.

And what can do to save money on car insurance? Several things, actually.

How to lower your car insurance rate:

Stop the speed: This is the biggest step we can take so far. Speed ​​kills. It also maims, hurts, scratches and damages. As a nation, we have been on a fast spree since the Covid pandemic. It caused an increase in traffic deaths, which is only now beginning to decrease. In 2021, the latest year for which NHTSA has complete data, 28% of fatal accidents, 13% of injury accidents and 9% of property damage only accidents involved speeding – 12,330 people lost their lives in those crashes.

The payoff on your insurance bill from obeying the speed limit may not be immediate, but eventually the virtuous cycle of lower speeds equals fewer crashes, equals fewer damages that will pay off. (That is, if most or all of us do.) Again, there is a way to make safe driving pay now. We’ll get to that in a moment.

Consumer Reports I just published a list of other ways you the insurance customer can lower your premiums:

Change insurance companies: Most of us tend to pick an insurer and stick with it, rather than play the field. According to a survey of CR readers, consumers who switched said they got better rates and better service. So make insurance companies compete. CR suggests reviewing your coverage on an annual basis. And to facilitate this suggestion, CR says…

Get an independent insurance agent: Someone who represents several insurers will make it easier to compare and switch.

Increase your discount: CR says this can save you $400-$500 a year. The deductible is what you will pay out of pocket for a claim, before the insurer covers the rest. Increasing your deductible from $500 to $1,000 can reduce your premium by 20-25%. You just need to have money in the bank to cover a larger deductible if needed, but you could go years without filing a claim.

Drop-in collision and comprehensive coverage: Savings, up to $1,000 a year. If you’re driving an older car with declining value, this makes a lot of sense. CR offers a formula: If your insurance premium is more than 10% of the market replacement value of your trip, drop these coverages.

Take a refresher driving course: Savings, $200 per year. You might think you’re a great driver, and maybe you are, and maybe that idea sounds silly to you. But in some states you can get a 10% discount on your insurance. These courses cost just a little of your time and as little as $25. And who knows, you might learn something.

Report your mileage: Save $100. Maybe you haven’t been driving as much since the pandemic. Report your annual mileage to your insurer. They base your rates on the mileage they expect from a typical customer. If it’s less than 10,000 miles a year, you’re in luck. Meanwhile, maybe you have a garage queen, say a convertible that only comes out a few days in the summer. For really low mileage vehicles, there are insurers that will literally cover you on a pay-per-mile basis.

Package with your home insurance: Savings, $300, and you’ll have the convenience of paying it all with one check.

Pay out of pocket for minor dents and scratches on a vehicle: CR says you’ll save $300. We’re not sure what they mean by that, other than the unrealized amount your coverage could have increased if you had filed a claim. Just keep in mind that with modern technology-laden cars, even a small fender can be an expensive repair. But out of pocket it can still make sense in the long run, and it keeps your driving record clean.

Buy a dividend policy: Save $100 or more. Some insurers, such as Amica, offer these policies, in which you are essentially a shareholder who receives a dividend – it’s market-based, but in the 5% to 20% range. The premium cost may be higher, but it ends up being a net gain.

And here’s a biggie, although you might not like the sound of it:

Sign up for driver monitoring: You can save $800, CR claims. The insurance company will monitor your driving habits via a phone app or by inserting a device into your car. You’ll definitely want to ask questions about how the data will be used to calculate savings, how much savings you can earn, whether your data will be sold to a third party, etc. You probably have a lot of phone apps that are collecting data for you right now, of course. But tracking movements and recording driving behavior certainly feels more personal and intrusive. Going back to our speeding tips, here’s one way good driving habits can pay off in no time.

CR offered some other suggestions:

Don’t lose your liability coverage! This is the insurance you are required to carry and the amount you are covered for may not be enough. If you’re getting by on the minimum required by your state, it’s definitely not enough. Loretta Worters of the Insurance Information Institute told CR that the institute recommends minimum liability coverage of $100,000 / $300,000 / $100,000 (that’s for “per person bodily injury liability / accident bodily injury liability limit / property damage property.”) You’d also be smart to get an “umbrella policy” that has liability protection of $1 million or more and covers both the car and the home (since you’re aggregating). Also, uninsured motorist insurance is always a good idea.

If you are older, look carefully at insurance premiums: We all know that a teenager in the family raises our insurance rates. Conversely, rates tend to decrease with age. Older drivers are more experienced, more mature, more careful. But after age 70, you may see a sharp increase in what you’re required to pay. It’s time to shop around for another insurer. You can also take a refresher driver’s education course to get a break on your rates, offered by AAA, AARP or driving agencies or schools in your area. Lists of senior driver education resources are available online. Here’s more advice for senior executives.

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