No one ever wants to spend more than they have to on auto insurance. Now that many people have experienced layoffs, furloughs and reduced hours, the need to pinch pennies is even stronger. The good news is that there are many ways you might be able to save money on your auto insurance.
Keep Your Coverage
If you’re not driving much, you might be tempted to let your coverage lapse. Don’t. Although it might seem like a way to save a few bucks now, it can lead to bigger headaches – and major expenses – down the road.
You may be driving less, but you probably still need to drive occasionally. If you get into a crash without insurance coverage, you’ll be responsible for the damages. You could also face hefty fines for driving without insurance, as well as possible license and registration suspensions.
Even if you don’t get into a crash, you might still get caught. States can require insurance companies to report information about policy cancellations. Gaps in coverage can also lead to higher premiums once you finally get insurance again.
Ask If There’s A Usage-Based Insurance Option
Many auto insurance companies offer monitoring devices or apps to track your mileage and driving behavior. If you’re driving fewer miles, and you’re a safe driver, this is an option that could save you money.
But Get Rid of Coverage You Don’t Need
You need car insurance – but you might not need all the coverage you used to.
Each state has laws establishing the minimum amount of car insurance that drivers need. States typically require a minimum amount of bodily injury liability and property damage liability to ensure that drivers can pay for any injuries or property damage they cause. Some states may have additional auto insurance requirements, as well.
However, many drivers purchase more insurance than is required by law. This can be a very smart move, as the additional coverage types can offer important protection. If you’re driving less and need to cut costs, though, you might be able to get rid of something. This may not be ideal, but it can be better than losing coverage entirely due to nonpayment.
- Collision and comprehensive insurance cover your vehicle against damage from collisions, storms, animal encounters, theft and other perils. Before dropping this coverage, think carefully. Even if you’re not driving, your car could be stolen or flooded, for example. If you cancel coverage and then suffer a loss, you won’t get any compensation. Also, while collision and comprehensive coverage aren’t typically required under state law, the insurance may be required by your lender if you have a car loan.
- Uninsured and underinsured motorist insurance provides coverage if an uninsured driver causes an accident and injures you. Although the coverage is often highly recommended – states may require insurance companies to offer it – coverage can be declined.
- Rideshare insurance can provide important coverage for gig workers. Personal auto insurance policies don’t typically cover commercial activities, and that includes gig work. To make sure they’re fully covered, gig workers may need to purchase a special insurance policy designed for ridesharing. If you have one of these policies and you’re no longer doing gig work, you should look into dropping your rideshare coverage.
Adjust Your Limits
Just as many drivers have more coverage types than are required by law, drivers may also have higher limits than are required by law.
Again, this can be a smart move. If you cause a crash and the damages exceed your limits, you could be on the hook for the difference. People often opt for higher limits because they want to shield their assets from possible lawsuits.
However, if your limits are higher than the limits required in your state, you could consider lowering your limits to save money.
Normally, all the drivers in your household will be on your insurance policy. However, it is possible to have a driver excluded. If you have a high-risk driver in your household, a named driver exclusion could result in substantial premium savings.
But be careful! If the excluded driver gets into a crash, your policy will not provide coverage. The driver will need to obtain a separate policy for coverage. However, depending on the details of your situation, this may end up being cheaper than having one high-risk driver impact everyone’s premium. Contact your insurer to discuss the numbers.
Ask about Discounts
If you reduce your coverage and then experience a claim, you may regret your decision. But if you can qualify for a discount, you might be able to cut your costs without cutting your coverage.
Talk to your insurer to see if there are any discounts that you should be getting. For example:
- Students may qualify for good student discounts.
- Drivers with telematic devices may qualify for discounts.
- Drivers with a clean driving record may qualify for safe driver discounts.
- Cars with anti-theft devices installed may be eligible for discounts.
In some cases, you may be able to qualify for a discount if you take a qualifying defensive driving course. You might not even have to leave your house. Some defensive driving courses are available online.
Update Your Information
It’s important to tell your insurance company about any relevant changes. In some situations, this could even save you money.
For example, maybe you used to have a long commute. If so, this probably impacted your auto insurance rates. If you no longer have a commute because you’re working from home, you might be eligible for a lower rate. If you’ve moved to a safer neighborhood or your teenager just had a great report card, you might also save money
Contact your insurance agent to find out and be sure to get a free comparison quote from Jupiter Auto Insurance.