People are driving again. Analysis released by Apple shows mobility has been on the rise in the United States significantly since last year, when the COVID-19 lockdown was much firmer. As the school year is in full swing and many employees return to the office, many people travel and drive more. Although some insurers cut premiums and offered discounts during the height of the pandemic, according to the Insurance Information Institute, as the world slowly returns to normal, some experts are predicting auto insurance costs to skyrocket.
If you drive more, your car insurance premium could go up. But there are plenty of ways to keep your money in your pocket. Here’s a look at ways to mitigate rising insurance costs.
1. Increase your deductible
Increasing your deductible can lower your premium, which means that when you make a claim, you increase the amount you have to pay out of pocket before your insurance plan starts paying. This move could cost you later if you are the victim of an accident, as you will have to shell out more money before your carrier covers the damage. But if you don’t drive a lot right now, aren’t accident prone, and need to cut your monthly costs, it might be worth it. The most important thing to keep in mind, however, is to make sure that you will have enough money to pay the higher deductible if you end up in an accident.
2. Reduced coverage for older vehicles
Older cars may not deserve the same insurance attention as your shiny new Tesla or all the bells and whistles of a Mercedes-like policy. If your old car is in its last overhaul, you may want to remove collision coverage or comprehensive coverage for that vehicle, both of which cover damage to your car.
Discontinuation of coverage depends on the value of your car and the relative cost to cover it. Experts suggest that if your car is worth less than 10 times the annual premium, purchasing coverage for that vehicle may not be a cost effective option. One of the fastest ways to check the value is to scroll through Kelley Blue Book online.
3. Reduce your mileage by using public transport or carpooling – in other words, drive less
Carriers may offer discounts if you have a low mileage, which means you drive less than the average mileage per year compared to other Americans. Generally, you would be considered a low mileage driver if you drive less than 7,500 miles per year, but this is not a clear rule as what determines if you are a low mileage driver depends on factors such as: as your state, age and gender. The national average annual premium for Americans who drive 5,000 miles or less is around $ 1,612, according to Bankrate.
State Farm offers one of the cheapest monthly bonuses at $ 128 for low mileage drivers, according to an analysis.
If there is public transportation in your area, taking a bus a few days a week (or carpooling with others) could qualify you for low mileage discounts. If you don’t live in a public transportation area, you may also want to consider carpooling to work or school to reduce your mileage.
And of course, if you’ve switched to work or home study since the start of the pandemic and still haven’t returned in person, contact your carrier 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 together, which means you buy multiple insurance policies from the same company. You can get discounts on your premium ranging from 5 to 25% depending on the carrier.
5. Safe Travel Discounts
If you pride yourself on being a careful traveler, you’re in luck. Carriers offer discounts for safe driving and a modest claims history, and there are a number of discounts you can take advantage of here. Call your carrier to find out how you can sign up for these types of programs and once successfully signed up you should see your premium drop on your next bill.
State Farm, for example, offers both Accident Free Discounts, where you will get a discount if you’ve spent at least three consecutive years without an accident, in addition to good driving discounts, a discount on your premium for three or more years. without movement violation or responsible accident.
Telematics insurance programs are also a great way to get discounts for safe drivers, and they will factor in low mileage discounts as well. These programs monitor your mileage and driving behavior through a phone app or car jack device. Simply call your carrier to sign up for the plan, and while discounts vary by carrier and state, you might consider savings of up to 30% on your premium. You’ll start at a base fare that will be adjusted based on the telematics report, which will include factors like your average speed and braking habits. For example, State Farm will review your telematics data every six months to determine how safe your driving is, and based on those metrics, it will apply a discount to your policy ranging from 5% to 50%, according to Bankrate.
6. Buy a cheaper car
If you are looking to buy a new or used car, consider comparing insurance costs between different vehicles. Auto insurance premiums are calculated based on a variety of factors, and some of those factors are based on the car itself, including the price of the car, repair costs, and the general safety record.
âIt’s the thing people forget: you can buy a Honda or a Kia, and it’s cheaper, or you can buy a Mercedes or a Tesla – it’s going to be more expensive,â said Janet Ruiz, a chartered property. damage underwriter and director of strategic communications at the Insurance Information Institute.
And the difference in insurance cost for a Mercedes versus a Honda is glaring: the average cost to insure a 2019 Mercedes-Benz is around $ 4,201 per year, compared to an average of $ 2,151 per year for a 2019 Mercedes-Benz. Honda. This means that you will pay an average of $ 179 per month for the Honda compared to $ 350 for the Mercedes.