6 methods to avoid wasting on car insurance in 2021 – CNET
People are driving again. An analysis published by Apple shows that mobility in the US has increased significantly since last year, when the COVID-19 lockdown was much tighter. With the school year in full swing and many employees returning to the office, many people are out and about and driving more. Although some insurance carriers lowered premiums and offered discounts during the height of the pandemic, according to the Insurance Information Institute, some experts are predicting an increase in the cost of auto insurance as the world slowly returns to normal.
As you drive more cars, your auto insurance premium may increase. But there are many ways to keep your money in your pocket. Here you will find an overview of ways to reduce the rising insurance costs.
1. Increase your deductible
If you increase your deductible, you can lower your premium; That is, if you are making a claim, increase the amount you have to pay out of pocket before your insurance begins to pay out. However, this move could cost you later if you have an accident as you will have to spend more money before your carrier picks up any damage. But if you don't drive a lot, are not at risk of accidents and need to cut your monthly costs, it could be worth it. Most importantly, in the event of an accident, you should have enough cash to pay the higher deductible.
2. Lower coverage for older vehicles
Older cars may not deserve the same insurance coverage as your shiny new Tesla or all the bells and whistles of a Mercedes policy. If your old car is on the last lap, you may want to exclude collision insurance or fully comprehensive insurance for that vehicle, both of which cover damage to your car.
Whether or not you should cancel it depends on the value of your car and the relative cost of coverage. Experts suggest that if your car is worth less than ten times the annual premium, purchasing coverage for that vehicle may not be a cost-effective option. One of the quickest ways to check the value is to scroll through the Kelley Blue Book online.
3. Reduce your kilometers by using local transport or car pooling – also known as driving less
Carriers may offer discounts if you have low mileage, which means you will drive fewer than the average number of miles per year compared to other Americans. Typically, you are considered a low mileage driver if you drive less than 7,500 miles per year, but this is not a rule as determining whether you are a low mileage driver depends on factors such as your state, age, and gender. The national average annual premium for Americans who drive 5,000 miles or less is about $ 1,612, according to Bankrate.
According to research, State Farm offers one of the most affordable monthly premiums for low-mileage drivers at $ 128.
If there is public transport in your area, you can take a bus (or carpool) a few days a week for discounts on short kilometers. If you don't live in a public transit area, you can also carpool to work or school to reduce your mileage.
And if you've switched to work or study from home since the beginning of the pandemic and still haven't returned in person, of course, contact your mobile operator to let them know – and take advantage of all the savings.
4. Bundle your insurance
One of the easiest ways to save money on insurance is to bundle your home and auto insurance, which means you can get multiple insurance policies from the same company. Depending on the airline, you can receive a discount of between 5 and 25% on your award.
5. Safe travel discounts
If you take pride in being a safe traveler, you're in luck. Carriers offer discounts for safe driving and modest claims history, and there are a number of discounts you can take advantage of here. Call your wireless service provider to ask how you can sign up for these types of programs. After successfully registering, you should see your premium decrease on your next bill.
State Farm, for example, offers both accident-free discounts, where you receive a discount if you have spent at least three consecutive years without an accident, in addition to good discounts, a discount on your premium from three years without movement injuries or culpable accidents.
Telematics insurance programs are also a great way to get discounts for safe drivers, and they will also consider discounts for short mileage. These programs monitor your mileage and driving behavior through a phone app or a car plug-in device. Simply call your carrier to sign up for the plan, and although discounts vary by carrier and state, you can save up to 30% off your premium. You start with a basic tariff that is adjusted depending on the telematics report and includes factors such as your average speed and braking habits. For example, State Farm will review your telematics data every six months to determine how safe your driving was and based on these measurements will give you a discount on your policy that is between 5% and 50% according to the bank rate.
6. Buy a cheaper car
When looking to buy a new or used car, it's a good idea to compare the insurance costs of different vehicles. Car insurance premiums are calculated by a variety of factors, and some of these factors are based on the car itself, including the price of the car, the cost of repairs, and the overall safety record.
"That's the thing people forget: you can buy a Honda or a Kia and it's cheaper, or you could buy a Mercedes or a Tesla – it gets more expensive," said Janet Ruiz, a charter company liability insurer and director for strategic communication at the Insurance Information Institute.
And the difference in insurance costs for a Mercedes versus a Honda is huge: the average insurance cost for a 2019 Mercedes-Benz is about $ 4,201 per year, compared to an average of $ 2,151 per year for a Honda. That means you're paying an average of $ 179 a month for the Honda, compared to $ 350 for the Mercedes.