5 Ways to Save Hundreds of Dollars on Your Car Insurance Premiums

Save money on car insurance by following these simple steps, including upping the deductible, reducing coverage, or looking for usage-based programs.
Car insurance premiums usually start out higher for younger, inexperienced drivers. Premiums also go up for drivers who get into an accident. While many insurance companies do not hesitate to raise your premiums, lowering your premiums represents a tougher challenge. Luckily, there are some easy ways to save hundreds of dollars a year on your car insurance rate. And you don’t even have to switch car insurance companies to do it.
Check out these top 5 ways to lower your car insurance premiums:

Option 1 of 5: Opt for a higher deductible with your car insurance

Raising the deductible - which is the amount you must pay in the event of an accident before your car insurance kicks in - is one way to lower the cost of your overall premium. According to a Quadrant Information Services report commissioned by Insurance Quotes.com, raising a deductible of $500 to $1,000 saves car owners on average 9% on their car insurance premiums. This goes up to 16% if you raise your car insurance deductible from $500 to $2,000.
This can results in a savings of hundreds of dollars, depending on the type of car you drive, the amount of coverage you carry, and the state you live in. The following table from [insurancequotes.com[(http://www.insurancequotes.com/auto/car-insurance-deductible) shows these savings by state when you raise your car insurance deductible from $500 to $1,000.
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Savings After Changing Your Deductible
From $500 to $1,000
State Percentage difference in savings
Massachusetts 19.20%
South Dakota 14.30%
Kansas 13.40%
Wyoming 13.10%
Iowa 13.00%
North Dakota 12.40%
Wisconsin 12.10%
Nebraska 12.00%
Minnesota 12.00%
West Virginia 11.80%
Washington D.C. 11.60%
Indiana 11.40%
Ohio 11.40%
New Hampshire 11.20%
Montana 11.10%
Pennsylvania 11.00%
Missouri 10.90%
Illinois 10.80%
Oklahoma 10.80%
Hawaii 10.30%
California 10.30%
Maine 10.20%
Texas 10.20%
Arkansas 10.10%
Georgia 10.00%
Vermont 9.60%
Alabama 9.30%
Mississippi 9.30%
Idaho 9.10%
New York 9.10%
Tennessee 9.00%
Virginia 9.00%
Oregon 8.80%
Alaska 8.70%
Maryland 8.70%
Rhode Island 8.70%
Colorado 8.40%
Arizona 8.10%
Delaware 7.80%
South Carolina 7.80%
Kentucky 7.70%
New Mexico 7.40%
Utah 7.40%
Connecticut 7.40%
Washington 7.30%
New Jersey 6.90%
Nevada 6.40%
North Carolina 6.40%
Louisiana 5.90%
Florida 4.70%
Michigan 3.90%

Option 2 of 5: Take advantage of a usage-based car insurance program

Using a telematics device, some insurance companies, such as MetroMile, Esurance, and Progressive offer usage-based car insurance programs. The telematics device, which gathers data from your driving habits, easily plugs into the diagnostic port of your vehicle. It records the miles you drive, your driving behaviors, such as sudden stops and the speed you drive, and whether you drive during the day or night.
The car insurance companies then use this data to determine how much of a premium you must pay, calculated by adding the amount per mile to a base premium.

Option 3 of 5: Reduce your car insurance coverage

The ability to add or remove car insurance coverage allows you to reduce the amount of coverage on your car, thus lowering the premium. As your car ages or when you pay it off, consider dropping or reducing certain coverage, such as collision or comprehensive insurance, especially for cars worth less than 10 times the premium you pay.
Collision insurance is optional coverage that pays for repairs or car replacement after an accident. Comprehensive coverage covers damages not caused by an accident, such as theft, natural disasters, and vandalism, such as someone intentionally breaking your car window, stealing your hood ornament, or tagging your car.
To research the worth of your vehicle, visit one of the following sites online: Kelley Blue Book, TrueCar, and Edmunds.

Option 4 of 5: Drive fewer miles to save money on insurance

Reducing the number of miles you drive is another way to save on your car insurance premium. Carpooling with coworkers or cutting the amount you drive per year to below 7,000 miles saves up to 2%, on average, for drivers nationwide.
Some states, such as California, offer discounts as high as 20% for low-mileage driving, while others, such as Hawaii, offer no discounts because low-mileage driving is already a normal occurrence in the state.

Option 5 of 5: Bundle your car insurance with your home insurance

Bundling insurance policies represents a simple and easy way to reduce your car insurance premium. Depending on the company, you can save anywhere from 5% to 15% if you bundle your various policies together, including car insurance, home or renter’s insurance, or even insurance for multiple vehicles.
In addition to saving money on your premiums, bundling also offers the following advantages:
  • Makes managing the policies online easier since you can do so through the same portal.
  • Combines multiple policies so that they renew at the same time, simplifying the process.
  • You only need to deal with one company.
Many companies allow you to bundle your car and home insurance policies. A few include Progressive, Safeco, and The Hartford.
Saving on your car insurance premiums represents allows you to reduce costs and put your hard-earned money toward something else, such as bills, vacation, or even retirement.

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