Everything you need to know about insurance basics, like coverage types, limits, cost and more.
11 Simple Ways to Lower Car Insurance Premiums
Having auto coverage makes you feel safer on the road — at least when it comes to your financial protection. And though that peace of mind comes with a price tag, there are many ways you can save money on your car insurance premium.
Your premium for car insurance can vary by hundreds of dollars — and the more you know, the more ways you’ll know how you can save! There are a number of factors used to determine your car insurance rate, and though some of those factors are out of your control, we’ve highlighted some simple ways you can lower rates and save on your car insurance premiums.
What Affects Your Car Insurance Rates?
Before we dive in on how to save money on your car insurance, it’s important to understand what affects car insurance rates. Here are a few factors insurance companies use to determine your car insurance premium:
Your age is taken into account, especially if you’re a young driver, since the younger you are the riskier a driver you’re deemed to be by insurance companies. If you’re an American Family Insurance customer, you can help your teen make better choices behind the wheel by enrolling them in our Teen Safe Driver Program. You may even get a discount on your policy for enrolling!
Your driving history also affects your premium — sometimes for the better! If you have no tickets or violations, you can earn discounts for your good driving habits. In fact, at American Family, your good driving history makes you eligible for our good driver discount where you can earn a lowered premium in certain states. But if you have speeding tickets, reckless driving charges or other types of violations or tickets, you’ll see a hike in your premium since your insurer sees you as a higher risk.
Your credit score is another common rating factor when determining your car insurance premium. Typically drivers who have a lower credit score file more claims than those with good credit. Paying less for car insurance is just one more reason to improve your credit!
To put it simply, the more coverage you have, the more expensive your premium will be. This is because, if you file a claim, your insurer will be paying out to meet the higher coverage limit. This shouldn’t deter you from getting the best level of coverage for what your vehicle needs! If you’re not sure what types of coverage you need or the appropriate level of coverage based on your vehicle, your American Family Insurance agent is happy to answer any of your questions to clear up any confusion.
Years of driving experience, where you live, insurance history, type of vehicle and many more factors are used to determine your premium. Being in the know and understanding how your price is calculated gives you great insight that’ll help you save money on your car insurance.
11 Tips to Lower Your Car Insurance Premium
Now that you have an understanding of how your car insurance premium is calculated, it’s time to make some moves to lower your car insurance premium! From auto insurance discounts to simply being savvy about your options, here are some simple ways you can save on your car insurance.
Ask about discounts
No matter where you purchase your car insurance coverage, you’ll want to ask about available discounts. Discounts are the easiest way for you to lower your insurance rate — and it’s really simple to get them! In fact, at American Family Insurance, we may be able to offer you a discount simply for switching providers and choosing us as your insurance company. Learn about the various car insurance discounts you can receive as an American Family Insurance customer. Here are a few to start you off:
- With our multi-vehicle discount, if you insure more than one vehicle with us, you may qualify for a reduced auto insurance premium on your cars and trucks.
- If you have an active policy with another carrier and receive a quote from us at least seven days before the policy goes into effect you could be eligible for our early-bird discount.
- If you’ve been a loyal American Family customer for a while, we think you deserve a discount. The amount you save will depend on how long you’ve been part of our family.
Bundle your policies and save
You may have heard the term “bundling” when it comes to insurance. But what is bundling? It’s actually one of the simplest ways you can reduce your insurance premium!
Bundling is when you buy multiple insurance products with the same provider, like your auto and home, auto and renters, or even your auto and life insurance. Bundling makes things simpler for you, since you can make one convenient payment to protect what matters most to you, and can help you lower your car insurance premium.
Want to find out more about bundling? Take a look at our insurance bundle FAQs to educate yourself on this smart move.
Get to know KnowYourDrive
Want to take control of how much you pay for car insurance and become a safer driver in the process? Good news — you can! American Family Insurance offers a usage-based insurance program called KnowYourDrive. How does it benefit you? Basically, you’ll get a discount on your insurance premium based on how safe of a driver you are.* When you sign up for the program, we’ll send you an exclusive invitation to download our KnowYourDrive app at no cost. The app monitors your driving behavior and helps you learn safer driving habits. Based on your safe driving behavior, you can save up to 20 percent. The better driving habits you have, the higher a discount you can receive!
Find out more about how KnowYourDrive helps you take control of your auto insurance and reduce car insurance premiums.. In fact, get started now and earn an introductory 10 percent discount on your car insurance!
Save with safety features
If your vehicle is equipped with safety features — like factory-installed airbags, dashboard cameras and more — you could get a discount on your policy. Just ask your agent to see if you’re eligible.
Take advantage of AutoPay
AutoPay is another effortless way for you to save on your car insurance premium — and it even helps you avoid late payment fees. With AutoPay, your payments will be automatically deducted from your checking or savings account. So not only can you earn a discount with AutoPay, but you can avoid late payment fees, too! Check and see if your insurance company offers a discount for enrolling in AutoPay — American Family insurance does!
If you want to set up AutoPay with American Family, simply enroll in My Account, register your account(s) and set up your payments. What’s My Account? It’s all about making your busy life a little simpler. When you enroll, you’ll get easy access to your policies, bills and claims. You can even use My Account to contact emergency roadside assistance if your car is stranded on the road.
Want to help save a few trees along with saving some money? Opt for paperless billing. Ask your agent if you qualify, and if so, you’ll need to set up paperless billing within 10 days of setting up your policy. The steps are simple to follow and it only take a few minutes. Here’s how paperless billing works.
Pay in full
Want to shave some major bucks off your car insurance premium? American Family offers a full-pay discount when you pay your policy in full at the time of purchase.
Know what you need
You might not need particular coverages once your car reaches a certain age and value. For instance, do you need collision insurance on an older car that’s not worth much? Probably not. Your insurance agent can work with you to help you determine the best coverages for your needs. Taking the time to do some research, asking your agent questions and knowing what you’re paying for on your policy can help lower how much you pay for car insurance.
Raise your deductible
Your deductible is the amount you’ll pay out of pocket before your insurance company covers comprehensive or collision claims. When you set your car insurance deductible, you’ll choose either a high or low deductible. A lower deductible means you’ll pay less out of pocket after filing a claim, but your premium rate will be a little higher per pay period. On the other hand, a higher deductible means you’ll pay more out of pocket if you file a claim, but your premium will be less per pay period. So to lower how much you pay for your car insurance, consider raising your deductible.
Compare insurance costs before you buy a car
One of the factors taken into account when determining a car insurance premium is the value of your car, the cost to repair it, the likelihood of theft and its safety record. So think about how the type of car you buy could impact your car insurance rate.
Shop around, research and ask questions
Take your time looking for car insurance. Shop around, get car insurance quotes and don’t be afraid to call up the companies and ask what kind of discounts you could receive. The best way to save money on your auto insurance premium is by being informed and asking questions.
At American Family Insurance, we want to help you understand your coverage and your options to reduce your premium and save on your car insurance. Take control of your insurance by connecting with an American Family agent today to learn how you can get quality protection, discounts and peace of mind.
*Program discounts will vary based on driving behavior. The KnowYourDrive discount applies only to the following variable coverages, which are typical for most auto policies: bodily injury liability, property damage liability, collision and comprehensive, medical expense, underinsured and uninsured and personal injury protection. Additionally, the discount does not apply to fixed fees that are part of your policy.