Sometimes I forget what car insurance I have. It’s easy to do since I’ve had car insurance through three different companies in seven years.
The insurance companies didn’t do anything wrong, but every year when my husband and I review our policy, we check out the competitors to see which one offers the best rate. Sometimes we jump ship. Other times we remain loyal — at least for another year.
Reviewing your car insurance policy is one of the easiest ways you can save money every year. Here are a few things you can do to save hundreds of dollars on your car insurance.
1. Find out how much insurance you need
Laws vary by state, so make sure you know what’s required in yours. In most states, you need some variation of personal injury protection, bodily injury liability coverage, and property damage liability coverage.
For example, in my home state of Florida, I need at least $10,000 in personal injury protection. In Maryland, you need $30,000 for bodily injury liability coverage. Once you know what you need, you can shop for car insurance accordingly.
But don’t discredit the extra investments. After a woman without insurance totaled my car a few years back, I discovered I didn’t have uninsured motorist coverage. While my car and recovery were addressed, I missed out on nearly $10,000 in cash because Florida is a “no-fault” state. Now, I always make sure uninsured motorist coverage is included in my policy.
You might want to consider collision insurance, which helps you repair or replace your vehicle regardless of who is at fault. Or you can opt in to accident forgiveness coverage, which means if you crash a car, your premiums won’t go up. In Florida, if I crash a car, the state can request that I have bodily injury liability coverage.
2. Compare insurance companies
Most insurance companies have comparison shopping tools on their sites, but feel free to use a third-party site such as Compare.com or Insure.com. When you compare insurance companies, make sure you get quotes on the same coverage.
At this point, you usually can find companies you want to explore further and companies you want to skip. The Insurance Information Institute recommends that you compare at least three price quotes.
Both the Insurance Information Institute and Consumer Reports recommend finding a top-rated insurer. The cheapest option isn’t always the one you should choose. Find a company that has your best interests in mind.
3. Haggle your heart out
You’ll spend most of your energy on this step. Set aside time to call some companies — your current insurer and the few you’re interested in. Be civil, polite, and respectful.
Tell your current company that you found the same coverage elsewhere for less money. Usually, your current insurer will try to keep your business and match the price. Sometimes, it will offer another discount between 10% and 15%.
If you like your current insurance company, you can stop here, as your work is almost done. If you don’t, it’s time to call another insurer. The new company might match the low cost to lure in new business, but don’t be upset if it says it can’t go any lower.
Companies might not feel as inclined to win the trust of new customers. Don’t be discouraged if you get rejected. You can be nice and persistent in your negotiations. You never know if a company will agree unless you ask, especially when it comes to discounts.
4. Ask about discounts
Not all drivers are created equal. Your driving record has a direct impact on your car insurance rates. At some companies, good drivers get discounts simply for being good drivers. Other discounts include:
Being a member of certain groups or organizations (including professional groups or alumni associations)
Completing driver training courses
Combining with other insurance, such as homeowners, renters, or life insurance
Having good credit
Having multiple vehicles on one policy
Getting good grades as a student driver (and if you’re a student away from home, you might qualify for another discount)
Reducing mileage (some offer pay-as-you-go options)
Driving an older vehicle
Being at least 25 years old
Being a newlywed
Your cost also depends on if you’re leasing or buying a car (as well as what kind of car you’re getting). If you’ve had a big life change, such as the loss of a family member or medical problems, Consumer Reports suggests asking your insurer for an exception.
5. Pay your premium upfront
Many companies offer extra savings if you pay your six-month or 12-month premium upfront. If you can swing the extra cost, it’s worth saving in the long run. Keep in mind that not all insurance companies offer this perk, so when you’re in the haggling stage, inquire about this opportunity.
Always review your car insurance
If you’ve always had your car insurance deducted from your bank account without giving it another thought, you might be missing out on extra money in your pocket. You could use it to pay back your student loans or stash it away in an emergency fund or retirement account.
Regardless of what you do with your newfound money, make sure you review your car insurance policy every year to get the best deal.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|