Top 5 Ways to Lower Your Car Insurance Costs Legally

Car insurance is a significant ongoing expense, but you have more control over the cost than you might think. By understanding how insurers assess risk, you can take legal, proactive steps to lower your premiums.

1. Shop Around and Compare Quotes

Insurance companies use different proprietary algorithms to calculate rates. A driver profile that is considered high-risk by one company might be viewed more favorably by another. You should legally and freely shop around and compare quotes from at least three different insurers every year or two to ensure you are getting the best rate.

2. Increase Your Deductibles

Your deductible is the amount you agree to pay out of pocket before your comprehensive or collision coverage kicks in. By legally amending your policy to carry a higher deductible (e.g., raising it from $500 to $1,000), you take on more initial financial risk. In return, the insurance company will significantly lower your monthly premium. Just ensure you have the deductible amount saved in an emergency fund.

3. Bundle Your Policies

Insurance companies want as much of your business as possible. They offer substantial "multi-line" discounts if you legally bundle your auto insurance with your homeowners, renters, or life insurance policy under the same carrier. This can often save you 10% to 25% across all your policies.

4. Take Advantage of Discounts

Insurers offer a wide variety of discounts, but they don't always apply them automatically. You must ask for them. Common discounts include:

• Safe Driver / Claim-Free: For going a certain number of years without an accident or ticket.
• Good Student: For high school or college students maintaining a B average or higher.
• Defensive Driving Course: For voluntarily completing an approved driver safety course.
• Vehicle Safety Features: For cars equipped with anti-theft devices, anti-lock brakes, or advanced safety systems.
• Low Mileage: If you work from home or drive less than the average person.

5. Improve Your Credit Score

In most states, it is perfectly legal for insurers to use a credit-based insurance score to determine your premium. Actuarial data shows that drivers with lower credit scores file more claims. By paying your bills on time, reducing debt, and correcting errors on your credit report, you can improve your score and legally qualify for lower insurance rates.