10 Strategies To Lower Your Auto Insurance

Over at the Mint blog they’ve posted a list of 10 ways to reduce your car insurance premium. You’ll want to contact your current insurer and ask some questions, like whether they offer a discount for paying up front, or if they’ll cut you a deal for being a long-term customer.

Other tips include reducing your mileage and having a theft-deterrent device installed. You might also want to compare risk classifications for cars if you’re shopping for a new one—your insurer should be able to provide you with a comparison chart.

“10 Things That You Can Do To Lower your Auto Insurance Premium” [Mint]
(Photo: TheAlieness GiselaGiardino²³)

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  1. azzie says:

    #11: Move to a state where insurance premiums are lower.

    I find it shocking but I’m paying less for two cars in MA than I paid for a single car in NYC.

    And don’t even bother having car in NJ !

    • UCLAri: Allergy Sufferer says:

      @azzie: Oh man. Can you imagine the poor actuaries in NYC trying to figure out the Yellow Cab effect on accidents?

    • Orv says:

      @azzie: Sometimes just moving to a different zip code is enough to make a big difference, for that matter, depending on what the risk profile of the two zip codes is.

      • mac-phisto says:

        @Orv: that pisses me off. i literally moved 4 miles down the road from where i used to live – different zip code, same road. my insurance jumped $300/year.

        the funny thing is that before i had on-street parking & now i have a driveway.

        i understand the reasoning for the profiling, but the b.s. part to me is that i drive the same roads as i did before, i just get to pay an extra dollar/day to do it.

    • brettshow says:

      @azzie:
      I moved from Portland to Boise with a clean record and a new car with full coverage, went from 120/month to 57/month. The one benefit of Boise!

    • morganlh85 says:

      @azzie: Hell, move to a different TOWN. I know so many people who “live” outside the city of Detroit to lower their premiums by HUNDREDS of dollars.

    • mac-phisto says:

      @azzie: the reason you’re paying less is b/c the state regulates what insurance companies can charge. MA started doing this b/c insurance had become so expensive that uninsured drivers became a huge problem. interestingly enough, insurance companies threatened to leave MA in droves if the state took this approach, but many companies still insure there (though there are some that held to their word & won’t insure MA drivers).

      personally, i’m amazed that anyone in that state can get a driver’s license, let alone insurance. =P

      • Traveshamockery says:

        @mac-phisto: Really? Can you provide some sort of link that talks about that policy? It’s not that I don’t trust you, I’d just like to see for myself.

        • mac-phisto says:

          @Traveshamockery:

          The purposes of 211 CMR 79.00 are:
          (a) To promote the public welfare by regulating insurance rates so that they are not excessive, inadequate or unfairly discriminatory;
          (b) To promote the accuracy and fairness of private passenger motor vehicle insurance rates;
          (c) To protect the interests of policyholders during the transition from a Fixed-and-Established Market to a Competitive Market;
          (d) To promote price competition among Insurers so as to provide insurance rates that are responsive to Competitive Market conditions;
          (e) To prohibit price-fixing agreements and other anticompetitive behavior by Insurers;
          (f) To provide regulatory procedures for the maintenance of appropriate data reporting systems;
          (g) To authorize essential cooperative action among Insurers in the ratemaking process and to regulate such activity to prevent practices that tend to lessen competition substantially or to create a monopoly; and
          (h) To provide price and other information to consumers to enable them to purchase insurance suitable for their needs.

          [www.lawlib.state.ma.us]

  2. astraelraen says:

    The mileage thing is pretty huge. I work 2 miles from my office and my wife is a stay at home mom. A friend tipped us off on low mileage insurance discounts.

    In our case, State Farm offers one if you drive <7,500 miles a year – which we do.

    It literally cut our 6 month premiums in half.

    • NewsMuncher says:

      @astraelraen: Yep. Every time we move, I have to change our address with Geico, which leads to me having to re-calculate our mileage. I’ve noticed big differences between addresses in the same town where the only thing that I can figure that changed was just work mileage.

    • Taed says:

      @astraelraen: I do the same low-milage thing with State Farm, but it made very little difference for me; something on the order of $20 / 6 months. It may be correlated with having them as my insurance for 25 years without any accidents or claims of any sort along with a whole bunch of other discounts(multiple cars, multiple lines, etc.).

    • Hoss says:

      @astraelraen: Too bad your agent didn’t mention this. That’s kind of why they got a job

    • Nicholeigh says:

      @astraelraen: that applies only in certain states. In TX State Farm doesn’t rate based on mileage, so no discount for us here. :(

    • kexline says:

      @astraelraen: As far as I can tell, no one offers low-mileage discounts in my area. I’ve checked in periodically with my last two insurers, and that claim there’s no such thing.

  3. MooseOfReason says:

    #12. Change state law regarding auto insurance mandates.

  4. crazedhare says:

    I just went through this.

    I considered reducing coverage slightly or increasing deductible, but these items would have saved me a mere $7-$20 per year while significantly increasing my personal financial risk. Frankly, I think it is poor advice to increase a deductible (exposing yourself to hundreds more in risk) just to save $20 a year. And I checked this with my carrier (Liberty Mutual) and others – Progressive, Geico, State Farm.

    When it came down to it, I just called Liberty Mutual and said “I saw a lower quote from Progressive, based on a match in the coverage listed on my deck page. I don’t really want to switch, but money is tight and price has to be the priority this year.” Miraculously, my premium went from $780/year to $620/year, AND they found a discount they applied retroactively to make my amount due for the next 6 months of coverage $501 total (This for $100k/$300k/$50k policy with 2 drivers). The person on the phone at Liberty Mutual actually listened to me and treated me like a human being, too (yay). I got her email address and sent her an email thanking her and praising her professionalism, and expressing that I remain a customer because of her. I hope she forwards it to her boss.

    So, I would replace “Increase your deductible” with “Just ask.”

    • pr0k says:

      @bunnymare:

      I’d be pretty bothered if I had to call and ask for discounts I should already be getting.

      The only reason an insurance company would have for not giving you said discount, would be to make more money from your premium. So even though it may seem like Liberty Mutual is doing you a great service by applying that discount, they actually should have been giving it to you all along.

  5. Klaus_Kinsky says:

    Damn, that picture looks like my old Nissan pickup!

  6. imationlh says:

    Your credit score is significant contributor to how high your premium will be.

  7. henrygates says:

    11. Have a sex change operation.

  8. Neurotic1 says:

    F*** the insurance companies that use a person’s credit score to jack up rates. That should be more illegal than redlining.

    • AllanG54 says:

      Grow up….ALL insurance companies use a person’s credit score to rate their customers. It’s a statistically proven fact that people who have crummy credit make more claims for higher amounts that people with good credit. Caveat emptor….pay on time.

      • Lauchlin says:

        @AllanG54: For what it’s worth, the opposite is what usually happens. People with great credit get a discount, while people with average or bad credit pay the full price.

  9. Mozoltov, motherfucker says:

    Tell them that you are married. I am single and the agent asked me if I said I was married I would save money, I ended up saving $10 per month.

  10. chaoss13 says:

    Anyone notice that most of the list are silly expensive suggestions?

    Drive a different car.. A.K.A. buy another car.

    Drive less, even says to move closer to work. Yea, most people move to save car ins. money.

    Buy a vehicle with an anti-theft device (again… who can’t afford a car right now). Even having one installed. Unless you install it yourself, it’s usually about $200+ for a cheap system.

    Reduce your Ins. levels isn’t accurate either. I increased my coverage from the state minimum to a nice middle-high range of coverage…my rates dropped. Apparently, profiling people by the coverages they elect is fine. They told me that most people who get minimum coverage are more likely to have accidents.

    Good comments section for real world tips. But that article is a little brainless.

  11. startertan says:

    I gotta take issue with #9 – Be a loyal customer.

    I was with Allstate since I could drive at 16 (I’m now 30) and I finally decided to stop being lazy and see what the company discounted offerings through Liberty Mutual could get me for both my car and homeowners insurance. I went from a total of $2700/year (2 cars, 1 detached single family home) to $1500/year with the same coverage levels. I called Allstate to give them a chance to counter since I’ve been with them so long and my agent told me there was nothing he could do…he couldn’t even come close.

    I mean he didn’t even try, there was no “well the best I can do is $2200/year” or something like that.

  12. econobiker says:

    Make sure your insurance matches where you live and go to university especially for college or graduate school students. If you attend a college in a cheaper insurance state than your parents home is in, make your insurance and registration match that state.

    I’m looking at you Vanderbilt University (Nashville, TN) medical students driving around with NJ and NY license tags…

  13. There's room to move as a fry cook says:

    There are no “loyal customer” discounts. I was with Allstate for years with a clean record and no claims. Then they jacked my rate 50%. It was obviously a broad corporate decision that the local agent had no control over. He made up all sorts of bogus rationales but obviously didn’t have a clue as to why it went up. I switched to 21st Century (old AIG) and now pay less than my original rate with Allstate.

  14. Al Swearengen says:

    Which insurance companies give a low mileage discount? I have Allstate, and they don’t give a discount for that.

    • JollyRogargh says:

      @Al Swearengen:

      A lot of people confuse rating a car as pleasure vs. “low mileage discount”

      Few companies give an actual “discount” for it – most just “rate” the vehicle as pleasure, which can in turn lower the premium.

      So if you drive 50 miles to work every day then get a job closer to home, make sure to update it on your insurance as it will probably lower your premium. Typically a commute under 5 miles one way will be considered a “pleasure” use vehicle and will be rated as such.

  15. Anonymously says:

    I have a feeling that I’ve got too much coverage, but I don’t understand the details of car insurance to know for sure. I’m mostly worried about protecting my family from financial ruin, but I don’t trust the insurance agents themselves to help determine what coverage I need. What resources should I see out to help determine what coverage I need to protect my family?

    • JollyRogargh says:

      @JohnQPublic:

      John – That’s what your agent is for. Make picking an agent like an interview process. Find one you like and trust, and go with them.

      There is always google. Look up insurance limits and what they mean. Decide for yourself. Can you afford to pay out of pocket for a claim if you get lower coverage?

      Think of this: If you go with state minimum coverage (often a split limit of 25/50/25) and cream a pedestrian or cause a serious accident – you will be on the hook for ANY damages caused over $25,000.

      The 25 is the “per person” limit and the 50 is the “per accident” limit. The second 25 is your “property damage” limit. A telephone pole in CA can run upwards of 20k. If you hit a car with 2 people in it, one claims 10k of damages and the other claims 30k, you are under the 50k per accident limit BUT over the 25k per person limit on Mr. 30k… so you owe him 5k.

      Anything your insurance won’t cover is your responsibility.

      Find an agent… really. I’ll admit there are some sleazy ones out there, but most of them are honest people who look out for their clients.

      • Anonymously says:

        @JollyRogargh: Good advice, thank you. I’m still cynical/paranoid that the insurance agents are for “making themselves and the company as much money as possible”, not looking out for me though.

  16. masterasia says:

    Here’s my Trick #1:
    Put it under my wife’s name.

    For some reason, when I get a quote under my name it’s always $200-$300 higher than if my wife would to get the same exact quote.

    Here’s my Trick #2:
    Put your residency in an area where Insurance is cheap like why out in the country or in Wisconsin.

    My cousin has lived in MN for 4 years, but his license, address, plates are still in Wisconsin. That damn crook.

  17. heart.shaped.rock says:

    Lowering your coverage limits can also save you from lawyers. I had a bicycle vs. car incident where the rider at fault and cited by the cops, but in my state the motorized vehicle driver is still responsible for injuries if you you have PIP coverage. Soo…the other party decides to go after me, personally (bahahah!! I got nuthin’..), just in case. My insurance company hired me a lawyer who told me, “you know the only reason they’re going after this for so long is because you have high coverage limits. If you had the 25/50 minimum, we wouldn’t be here right now. They want the whole thing.”

  18. theblackdog says:

    USAA dropped my premium in half several years ago when the CSR asked about my driving habits. Since I didn’t drive to class at the time, my usage was re-classified as “Pleasure” instead of “Work” or “School”

    Now that I am in the workforce, I still get to take advantage of that discount because I use the subway to get to work instead of drive.

  19. sonneillon says:

    @H3ion: It depends on your net worth. If the court awards the plaintiff 100,000 dollars over your policy and your total net worth is a 1,000 dollar hooptie and 500 bucks in the bank. Then umbrella coverage is meaningless. Consult a bankruptcy lawyer and use that 500 bucks there.

  20. sonneillon says:

    @Orv: They can only go after what you have right at the moment of a lawsuit and it is very difficult to collect when the judgment is far more than the persons net value. Often times you can force them to pay pennies on the dollars under the threat of a chapter 7 where they will likely get nothing.

  21. schance says:

    @Orv: Comprehensive is usually cheap, especially on an older car – my company charges about $30/year on a car that’s 12 or 15 years old, for a $100 deductible. I’d keep comprehensive just for windshield replacements.

  22. MooseOfReason says:

    @Orv: I meant mandating that auto insurance policies include certain things, and therefore raising the cost.

  23. mac-phisto says:

    @catastrophegirl: yeah, i think i explained that backwards, though, so for clarification:
    *CLUE – keeps track of claims made against your insurance policies.
    *driving record – lists all vehicle infractions you were ticketed for & paid.

  24. pot_roast says:

    @Nicholeigh: Agreed. This is where the “buy everything in cash” mentality really hurts.

  25. kexline says:

    @pot_roast: I’m taking a $20 online defensive driving course through Geico right now. I’ll finish it because the discount at the end of the tunnel is significant, but it is truly awful. Whoever designed is a serious misanthrope. Also, anyone writing professionally for a national audience should know the difference between “affect” and “effect.” They’re not even homonyms, FFS.

    I’ve often wondered how affiliation discounts happen. Do the member organizations pay the insurer, or guarantee some number of customers? And I agree with you that these discounts can be perverse. My insurer offers a discount to members of a college honors society that charges steep fees and accepts students in the top 15% of their class. Seriously? The top 15% of students at my school are the ones who can tie their shoes after consulting a diagram. I wound up joining a more selective general honors society. It’s smaller, so there’s no discount even though better grades supposedly indicate lower risk.

  26. pr0k says:

    @pot_roast:

    Actually fire/police/ems are considered government employees and see better rates (typically) with Geico.

    “Being that Geico stands for Government Employee Insurance Company, we do try to get our best rates we can for our military and government employees.”

    You are correct that you do not get a discount, but actually this is applied to your overall rating factor. That is most of the time BETTER than a discount. (Discounts can sometimes only affect certain coverages, and may be dropped if you have claims.)

  27. chaoss13 says:

    @JollyRogargh: Yes, but is that not called “profiling”? Consdiering they feel you are more of a risk if you have the lower coverage.

  28. imationlh says:

    @JollyRogargh: Correct! You should see some of the comments about “premium matching” I see on policies at my job.

  29. pr0k says:

    @bunnymare:

    There is no such thing as “price matching” with insurance rates. Underwriting guidelines and the rates themselves are all filed through the state and are very very specific.

    If they lowered your rate upon request, they were either charging you more to make more commission from you in the first play, or not giving you a discount you already qualified for you, but were ignoring to try to make even more money from you.

    My Geico insurance has automatically put new discounts that I have qualified for every 6 months. I haven’t had to ask for these, and I pay much less then anywhere else I’ve quoted. No reason for your attitude.

  30. crazedhare says:

    @pr0k: Rates are filed and yet flexible.

    TBH, I am an insurance broker – on the life side. We can always quote standard rates but use a competitive bidding process to squeeze a price match in. I’ve done it a few times this week.

  31. pr0k says:

    @bunnymare:

    I believe the property side must be a little bit different. We have absolutely no flexibility without changing underwriting guidelines.