20 Ways to Save on Auto Insurance in 2020

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Looking to save money in 2020? Start with your auto insurance! Auto insurance may be a requirement to operate a vehicle, but just because you have to have coverage doesn't mean you need to overpay for it.

We've got 20 tips to help you save on your insurance rates in 2020.

1. Bundle Coverage

You may hear the word "bundle" a lot in the insurance world, and for very good reason.
Bundling is a tried-and-true tactic that can help you save money when you combine multiple policies through the same provider.

Ask your insurance provider how much you could save if you bundled your auto coverage with a homeowners or renters policy, for example.

2. Pay Premiums Annually

Insurance premiums can typically be paid in two ways: annually or monthly. Most people choose monthly premium payments. But wait: there could be a cost-saving benefit to paying a single, annual insurance payment, instead.

Most insurance providers will offer a discounted rate if you decide to pay your premium all at once. If you have the cash reserves handy, your overall insurance costs could be lower if you make a single annual payment rather than monthly premium payments.

3. Increase Deductibles

Want to save money on your auto insurance? Increasing your deductibles is a tactic many vehicle owners use in order to lower their premium payments.

There is one caveat to this tactic:

If you don't have the resources available to cover the increased costs, don’t increase your deductible amounts.

The deductible is the amount you’re responsible for before insurance kicks in and covers your claim. If you have a deductible that's so high you won’t be able to pay it, then this money-saving strategy isn't actually doing you any good.

If you have enough funds set aside to cover a higher deductible amount, then increasing them can be an easy way to reduce your monthly premium rates.

4. Perform an Annual Coverage Review

Do you have the right coverage for your vehicle and driving habits? It's all-too-easy to renew your coverage without reviewing it year after year. And that could be costing you money.

Sit down with your insurance professional and review your policy before you renew. You may have taken a job with a shorter commute, or your vehicle may be aging and not need the same amount of coverage (more on this in a minute). Your teenage driver may have moved out of the house, or any number of life changes may have occurred from one year to the next.

An annual review ensures you have the right amount of coverage so you don't overpay for protection you no longer need.

5. Reduce Coverage on Older Vehicles

How long have you had the same coverage on your vehicle? As your vehicle ages and its value drops, you may want to consider dropping collision or comprehensive coverage on it.

According to the Insurance Information Institute, additional coverage such as collision or comprehensive may not be worth it the value of your vehicle is less than 10x your premium.

(You can check the overall value of your vehicle on Kelley Blue Book.)

6. Don't Confuse Business Use with Personal

Do you use your personal vehicle for business purposes? Maybe you use your truck during the week to transport tools and equipment for your business. Or maybe you let your employees use your personal SUV to pick up materials and supplies. Perhaps you use your personal vehicle to deliver pizzas, groceries, or rideshare people to the airport.

When your vehicle is used for business purposes, it's not covered by your personal insurance policy. If you got into an accident using your personal vehicle for business purposes, your claim for damage could be denied. Worse -- your policy could be dropped.

In this case, having the wrong coverage in place could cost you big.

7. Don't Let Coverage Lapse

Many insurance companies will offer a premium discount for no-lapse coverage. Even if there's not a financial incentive for keeping coverage consistent, it's still a good tactic to keep your payments coming in on-schedule.

If you get in a tight spot and need to prioritize your expenditures, don't skip payments or temporarily drop insurance policies.

If you have a prior cancellation for non-payment on a policy, you may find yourself ineligible for future coverage. If you are able to get covered again, a history of dropping policies and picking them back up again can flag you as high-risk and lead to higher premiums in the future.

8. Skip Small Claims

Your claims history is a major determining factor for your insurance premiums. Several small claims can signal a larger risk than if you had one large claim. The more risky you appear to insurance providers, the higher your premium amounts will be.

Don't sweat the small stuff. If you have a minor incident that you can afford to pay out of pocket, it may be worth it to skip the claim process. Absorb the smaller losses and save your insurance for the big claims that you don’t have the reserves to cover.

9. Ask for Auto Pay Discounts

The method in which you make payments could save you money on your premiums. Some insurance providers may offer a discount if you sign up for autopay or EFT (electronic funds transfer) rather than receiving a bill.
While you're at it, ask about discounts for other paperless options, such as signing your documents electronically.

10. Buy Vehicles with Lower Rates

Shopping for a new (or used) vehicle? Different vehicles come with different insurance rates.

Insurance rates can vary depending on a variety of vehicle factors. Minivans are often less expensive to insure because they're loaded with safety features and garner higher safety ratings. Used vehicles typically cost less to insure than their brand new counterparts, too.

On the flip side, a vehicle that's built for speed, comes at a luxury price tag, or is expensive to repair typically comes with a larger insurance premium rate.

Don't just take the sticker price of a vehicle into consideration. Consider the insurance implications of your purchase, too.

11. Maintain Your Vehicles

No matter how well you drive, you're not safe on the road unless your vehicle is in good condition, too. A vehicle that's not well-maintained could fail at a critical moment and lead to a collision, injury, or damage to others.

Follow the manufacturer's recommendations for checking the engine, cooling and ignition system, brakes, drive-train and emission-control system. Make sure lights, windshields, mirrors, and tires are well-maintained, as well.

12. Don't Drink and Drive

There are so many reasons not to drink and drive. The most significant is the risk of taking a life or permanently injuring someone else. But there are financial implications to drunk driving, as well.

If you get a DUI, you can expect to pay higher insurance rates for the next 3 years.

Even more costly, your insurer may deny coverage for any damages related to an accident if you were drunk while driving. That means you may be on the hook for injuries or damage to other drivers and passengers.

13. Background Check Employee Drivers

Safe drivers = lower insurance rates.  Your employee's driving records can factor into your premium costs when you need commercial auto insurance. Hiring employees with good driving records can help lower your commercial auto rates.

If you have employees that will be driving for your business, be sure to conduct background and driving record checks to keep your insurance rates low.

14. Go Local with Your Insurer

When you think of auto insurance, the big name brands may come to mind. But the big names don't always have the lowest prices.

Shop around local or regional insurance providers, instead. No time to shop around? A local insurance broker can do that for you -- selecting the best insurance provider with the right coverage plan for your needs. Choosing small and local for your insurance could get you better rates -- and better customer satisfaction, too.

15. Reduce Your Mileage

Lower mileage often equates to lower insurance premiums. If you only drive short distances, you should be able to get lower premiums. Keep track of exactly how much driving you do and then call your insurance provider to ask for a low mileage plan.

16. Work from Home

Do you have the option to telecommute? Take advantage of it. If you're not commuting to work every day, you could take advantage of low mileage discounts and save big. Home-based business owners and telecommuters who don’t do the daily commute can often save up to $2,000 - $7,000 a year.

17. Optimize Your Credit Score

Did you know that your credit score is a factor used by insurers when determining your insurance rates? Research has shown that people who manage their credit effectively also have fewer auto claims. In other words, the higher your credit scores, the lower the risk of insuring you.

Take steps to optimize your credit, such as  setting up payment reminders so your payments are made on time, paying off debt, and checking your score regularly. Optimizing your credit score can pay off as lower insurance premiums.

18. Slow Down

You already know this one: driving offenses can have a big impact on your insurance premiums. Your driving record is a factor that determines insurance rates, and speeding tickets, red light violations, and other driving offenses can signal to insurers that you're a higher risk than someone with a clean driving record.

So slow down, watch for the lights, and drive carefully to save on your premiums.

19. Avoid Adding Drivers

Are you considering adding one of your kids or other family members to your policy? You may want to rethink that decision if you want to keep your rates low. If your teenage driver or senior parent gets into an accident, you could be the one paying the cost of an increased insurance premium.

20. Stay Where You're At

While shopping around can get you a good deal in most cases, that’s not always true for senior drivers. In most cases, staying with your existing insurance provider could be more beneficial once you’ve reached retirement age.

Sure, you need auto insurance. But that doesn’t mean you have to overpay for your coverage. Utilize some -- or all -- of these tips and you may be able to reduce your insurance premium rates for 2020.

Need more ideas? Contact us for personalized recommendations to lower your rates on auto insurance and more.