4 Ways To Get Lower Auto Insurance Rates (Reduce Your Premiums)​

Did you know that auto insurance premiums increase by an average of 3 to 5% every year? In this episode, I’ll share specific actions you can take to help lower your auto insurance costs and keep more money in your pocket. This is The Auto Insurance Expert. I’m your host, Steven Lang, and I’m here to show you how auto insurance really works, so you can make faster, smarter decisions, choose the right coverage, and get the best value for your money.

If you’re a driver in the US and want to make buying auto insurance simple and stress-free, you’re in the right place.

Auto insurance premiums continue to rise year after year, and I understand why many people get frustrated paying more for what seems like the same product. However, there are several legitimate reasons why auto insurance costs keep increasing. First and foremost, vehicles continue to increase in value.

The average new car cost is now roughly fifty thousand dollars. When cars cost more to replace, insurance costs rise as well. The next major factor is the cost of repairs. Modern vehicles are packed with computers, cameras, sensors, and advanced safety equipment. In addition to traditional body and mechanical repairs, damaged safety equipment often has to be replaced and reprogrammed, significantly increasing repair costs.

Medical expenses also play a major role. As we all know, healthcare costs continue to rise across the, all spectrums, and certainly, and if someone’s injured and there’s a trauma or they’re in an emergency room, that requires emergency treatment, and the cost of delivering that care is extremely high.

Another factor is the growing popularity of SUVs and pickup trucks. These vehicles account for roughly sixty percent of the vehicles on the road. Because they are generally larger and heavier than passenger cars, they will cause more damage when accidents occur. These factors continue to drive up the cost of providing auto insurance, and they’re not likely to disappear anytime soon.

So with insurance costs likely to keep rising, let’s focus on what you can do to control your auto insurance bill. As a longtime insurance agency owner, I’ve seen renewal offers with significant increases, others that will remain flat, and yet others that actually decrease. The difference often comes down to a few key factors.

First, maintain continuous insurance coverage. So the first thing you can do to keep your insurance coverage is keep it continuously in force, i.e., do not let it lapse even for a day. Now, preferably, you keep the coverage with the same carrier. I understand that’s not always possible. Better deals, better values.

However, continuous coverage in place, strive for it. Insurance companies spend a tremendous amount of money and time in the effort to acquire new customers. So think about all the television, radio, online, and social media advertising you see and hear each and every day. Industry estimates suggest that the major carriers spend approximately five hundred and fifty dollars to acquire a new customer.

Because of that investment, carriers generally want to keep you as a customer. Most companies will offer a continuous coverage discount, which rewards policyholders who maintain uninterrupted insurance coverage with that carrier. So if you’re considering switching carriers, understand that while you may save money in the short term, you could be potentially lose some of the value associated with your continuous coverage history.

Next, what you can do to control or lower your auto insurance bill. Improve your driving habits. It seems basic, but it’s worth repeating. The next factor you can control is your driving record and claims history. Avoiding tickets and accidents is the most effective way to keep your premium low. Your carrier loves you when you are a claim-free and violation-free driver

How do you get to that place? Well, drive defensively, not offensively. As I tell my twins, my teenage twins, as they head out into the road, assume the other driver is going to make a mistake, whether that’s stopping suddenly, changing lanes without looking, or failure to yield, or running a red light or stop sign.

Assume it’s going to happen, and you will become a better driver Next, put your phone down. Many drivers believe they can safely text, email, or scroll while driving. They believe they’re the ones who have beaten the system. But distracted driving is one of the leading causes of accidents. Think about it.

Even if you’re talking on a hands-free phone, you have to think about the number you’re calling, the, the person you’re talking to, the subject matter, okay? That is different than completely focusing on the road. If you’re texting, which we’ve all done, or most of us have done, attempted to do, for sure you’re distracted, okay?

As you look down to f- the fingers, the nails, okay? So stop kidding yourself and put the phone down while you’re driving. You’ll do yourself and your fellow drivers a favor. Next, most insurance carriers offer a usage-based insurance program that tracks your driving habits, i.e., how fast you drive, how hard you brake, what time of day or night you’re driving, et cetera.

These programs often provide an upfront discount because the insurance data consistently shows that drivers will become safer when they know their driving behavior is being monitored. Let me repeat that. They want you to know they’re monitoring your driving behavior because the data absolutely shows you will become, or the vast majority of drivers become better when they know they’re being monitored.

For sure, you should have that program in place if you have teenage drivers on your policy like I do, okay? Make them know, let them know somebody’s watching what they’re doing. Now, I understand that some people have privacy concerns, and that’s completely reasonable. However, many vehicles, certainly all new ones or most new ones, smartphones, wearable devices, cameras, red light cameras already are collecting similar information.

So it’s out there. However, if you’re comfortable participating in the tracking program or the monitoring program, this discount can be an effective way to reduce your premium. Some carriers give a discount up to thirty percent of the premium Next, make sure you’re receiving every available discount that you qualify.

Okay? So most policyholders are surprised to learn they’re not receiving every discount they qualify for. Reason being the carrier or the agent doesn’t know about it. Okay? So Put on your calendar, contact your insurance agent and ask for a complete review of all available discounts. Okay? So common insurance, auto insurance discounts include continuous coverage, we’ve talked about.

Safe driver, self-explanatory. Claims-free history, also self-explanatory. Now, you can get, if you have students in the house, a discount based on their GPA. Carriers will give a discount based on the college degree you have, level of, AA, bachelor’s, master’s, even a doctorate, all those various levels of degrees, okay?

And a discount. Carriers will give discounts based upon what your occupation is. So let the agent know, okay? Get specific, so they can drill down into it. Carriers provide a discount if you’re a homeowner or a property owner. Carriers provide a discount if you’re a low mileage. That helps in the, uh, the tracking scenario, but it also makes sense if you’re driving fewer miles on an annual basis, you have less opportunity to, uh, get into an accident, et cetera.

So carriers will reward that. Multiple vehicles. If you have more than one vehicle, they should be on one policy. A, you get a discount for multi-vehicle discounts, okay? B, you have one bill, and C, you would have the same coverage limits, so when there’s a claim, it’s simpler to figure that out. Next, multi-policy discount.

Own a home, auto, home, RV, boat, jet ski, okay? Lots of different policies that carriers offer. Ask if they provide a multi-policy discount. Payment mode. Carriers will provide a paid in full discount, sometimes as much as eight percent on the total premium. Okay? So that can add up to be a pretty significant discount.

Ask about it. It’s there. Carriers will provide a paperless billing, paperless document delivery. They save on postage, and they’re passing that credit on to you. Affinity group memberships. Ask them. Might be your employer, might be the local Kiwanis Club. Lots of affinity group discounts out there. Ask your agent, and then see if you belong to one of those groups.

Some carriers will give a discount if you are retired or a senior. Lastly, all carriers give various levels of a discount for vehicle safety equipment, such as anti-lock brakes, airbags, anti-theft devices, cameras, sensors. Beepers, okay? So let your agent know that whatever safety equipment you have, you’re getting credit for each component, okay?

So each of these individual discounts are or could be small, but the combined savings can often offset or even exceed your annual rate increase. So it’s an effective way to keep your costs down, i.e., to control it. Lastly, let’s talk about your deductible and coverage options

A deductible is the amount you pay out of pocket before your insurance company pays on a covered claim. So one of the most effective ways to reduce your premium is by increasing your deductible to one thousand, fifteen hundred, or even two thousand if your carrier offers that option. Insurance companies favor high deductibles because policyholders have more financial responsibility in the event of a claim, i.e.,

you’ve got skin in the game. The trade-off is lower premiums. I often say this to customers when they ask me about it, “Well, if I have a claim and it’s, and it’s a thousand dollar deductible and, and I’m currently at two fifty, I’m out of pocket the seven hundred and fifty dollars.” That’s a large amount of money, and I agree, seven hundred and fifty dollars is a large amount of money.

But here’s the equation I ask them to go through. A, what is the premium savings between the two fifty and the one thousand dollar deductible? And let’s say it’s a hundred and eighty-five dollars per policy period. Then ask yourself, when’s the last time you had a loss? So loss being a claim. So typically, if you go three to four policy periods at the higher deductible and you’re claim free, you more than offset that difference if you have to come out of pocket for the deductible.

Okay? So remember, the ded-deductible only comes into play if you have a claim. Next, while you’re reviewing your deductible options with your agent, ask about your liability limits. Okay. Many drivers purchase their first policy, and they start out with, uh, the required limits in the s- in their given state, minimum limits, call it what you want, and they don’t realize that there are other options that are out there.

Life goes on. So ask your agent what would happen if you increase your liability limits to, say, fifty/one hundred, one hundred/three hundred, or even two fifty/five hundred. Okay? The reason is the carrier or most carriers To qualify for their preferred tier require these higher liability limits. Everything else being equal, they wanna see higher liability limits.

So you could be a preferred customer with every other criteria, driving record, continuous coverage, homeowner, the whole nine yards, yet you’ve got basic limits, so therefore you’re not in your carrier’s preferred tier. By increasing your policy limits, you may all of a sudden then qualify for the preferred tier.

So you, in essence, will end up paying less money and have more coverage. That’s a pretty good deal. So ask, see what the agent says. Not every carrier does it, but it’s certainly worth asking the question. Okay? Now, let’s recap. Here are the four things you can do to control your auto insurance cost. One, maintain continuous insurance coverage.

That means don’t let it lapse even for a day. If you’re gonna change carriers, make sure there’s a significant price savings to offset that continuous insurance coverage discount with the same carrier. Two, improve your driving habits and consider the usage-based monitoring discounts. They are worth it.

Three, make sure you are receiving every discount you qualify for. To do that, you gotta have a discussion with your agent or agency. Four, review your deductible and coverage limits with, again, your agent or agent to see if increasing your deductibles is a effective way to lower your premium, and if you increase your coverage limits, that you may qualify for a preferred tier.

That’s it. Good stuff on how you can control your auto insurance cost. In our next episode, we’ll discuss what to do when you need to file an insurance claim. Thank you. You’ve been listening to The Auto Insurance Expert. If you found this episode helpful, be sure to follow on your favorite podcast platform for more auto insurance insights.

Until next time.