Man on computer looking for ways to save on car insurance.

11 Ways to Lower Car Insurance Premiums

Updated September 2, 2020 . AmFam Team

Wondering how you can reduce your insurance policy payment and save on car insurance premiums? Here are some simple ways you can lower your insurance rate.

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:

Age

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.

Driving history

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.

Credit score

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!

Coverage level

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 (Opens in a new tab) 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.

Go paperless

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 (Opens in a new tab)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.

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    Rocks and gravel, damage from weather and even temperature changes are all common causes of a cracked, broken or chipped windshield. It might surprise you that repairing a cracked windshield is actually a pretty simple fix — as long as you take care of it right away. Because what may seem like a small, insignificant crack at first could turn into a bigger, more expensive problem if left unrepaired.

    We know the question you want answers to: Will my insurance cover windshield repair and replacement? The short answer is yes, with some minor stipulations. We’ve highlighted some key information about windshield repair and replacement to help you understand how your insurance helps cover these small but impactful damages.

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    Do I need a repair or a replacement?

    Did you know that a small chip or crack reduces the strength of a windshield by up to 70%?* And eventually those small cracks spread into larger cracks that just might require a full replacement (which means more money out of your pocket). Getting your chip or crack repaired right away helps preserve the structural integrity of the windshield, which is a critical safety feature of your vehicle, and almost always prevents damage from spreading into a more costly replacement.

    To determine if your windshield needs a simple repair or a full-on replacement, you’ll need to identify what kind of damage exists. For example, if you have a small break, like a half-moon, bullseye, star or combination, you’ll typically be able to get a quick repair — which usually only takes about 30 minutes to fix.

    Here’s a list of common types of cracks:

    Chip or ding. Usually, small chips or dings are caused by a rock or other hard object hitting the windshield and taking out a small chunk of glass. Though small and usually not impeding your line of sight, a chip or ding could eventually spread and require a full windshield replacement. So, take the time to get it repaired right away!

    Bullseye. A bullseye crack looks just like its name — and it’s usually one of the most common types of windshield damage. The good news is it’s one of the most repairable kinds of cracks.

    Stress crack. A stress crack occurs when your windshield is exposed to extreme variations in temperature in a short amount of time. For instance things like extreme or swift temperature changes like cranking up the A/C or heat can cause a chip to expand into a larger crack, or if you put hot water on your ice-covered windshield, a stress crack may form.

    Edge and floater crack. An edge crack is formed near the edge of your windshield, whereas a floater crack is near the center of the windshield. These kinds of cracks usually cover a large area of your windshield and will need a full replacement. Over time, all the bumps and other impacts that occur during driving can cause the edge or floater crack to worsen.

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    Does my insurance cover windshield replacement or repair?

    Insurance coverage for windshield replacement or repair depends on what type of coverage you have and the extent of the damage.

    If your windshield is damaged in a car accident, your collision insurance would cover repairs or replacement, but you’ll be required to pay a deductible, which is the amount you pay before your insurance company steps in.

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    No Deductible Windshield Replacement

    Do you have comprehensive insurance? At American Family Insurance, if your windshield is repaired instead of replaced for a covered comprehensive loss, the deductible is usually waived. Keep in mind that if the windshield needs to be replaced, you’ll still be covered, but a deductible may be applied.

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    How to File a Claim to Replace or Repair Your Windshield

    American Family Insurance offers a glass repair program with our trusted partner, Safelite. With them, we’ll work quickly to get your windshield repaired or replaced so you can get back to more important things.

    Make sure you file a claim before you take your vehicle in for repairs because your agent can help you determine how you’re covered. Remember, a repair usually won’t cost you anything, but a replacement will often require a deductible.

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    File Your Windshield Claim with the MyAmFam App

    File, track, and monitor the status of your claim from your phone with the MyAmFam app.

    Get in touch with our Glass Claims Department at 1-800-MYAMFAM (1-800-692-6326) or conveniently submit a claim online to Safelite.

    Have the following information on hand when submitting your claim to make sure the process goes as quickly and smoothly as possible:

    • Policy number
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    • Make, model and year of your vehicle
    • VIN

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    Does a windshield claim increase insurance?

    If you file a windshield claim, your insurance company typically won’t apply a surcharge, which is the rise in your insurance premium. However, if you do frequently file auto repair claims, your company could consider you a high-risk driver, which would cause a hike in your premium.

    Don’t forget to weigh your options when deciding to file a claim. Are you required to pay a deductible? Is the deductible going to cost more than your repairs? If so, maybe consider paying out of pocket for the repairs and avoid adding a claim to your car insurance history.

    At American Family Insurance, we want to make sure you’re confident and know all the ways you’re covered. Your agent is always happy to answer any questions you have about how you’re protected — in the meantime, check out more about our claims process so you know just what to do to keep moving forward when dealing with the unexpected.

    * Source: Belron® Technical, the world's leading vehicle glass research & development organization.

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    Personal Offense Coverage for Homeowners

    You probably have insurance to protect your home, car and health from the unexpected, but have you ever thought about putting protection in place in case you ever face a lawsuit for things like libel and slander? That’s where personal offense coverage comes into play. It’s a lesser known but important coverage available to add to your home insurance policy. Not sure what this coverage means? We’re here to help.

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    What is a personal injury endorsement?*

    Your home insurance financially protects you from many unexpected incidents, whether you’re at your home or away from it. But personal offense coverage doesn’t fall under the realm of protection provided by your standard homeowners policy. Insurance for personal offense is actually an additional coverage you can purchase on your homeowners insurance that’ll help protect you against personal offense allegations.

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    Do you need to add a personal injury endorsement to your home insurance policy?

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    What doesn’t personal offense insurance cover?*

    Though personal offense coverage can help you in instances where you’re in trouble for libel or slander, it doesn’t mean you should go ahead and say or write defamatory statements. Just as your other home insurance coverages have limitations, a personal injury endorsement also has exclusions and limitations on what it’ll cover. For instance, if you knew what you were doing was wrong or what you did was illegal, you likely wouldn’t be covered.

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    What does personal offense insurance cost?

    Adding a personal injury endorsement to your homeowners insurance policy is rather affordable — typically adding only a few dollars a year to your premium. Personal offense coverage is an inexpensive option that’ll pay off if you or a family member face a lawsuit.

    Contact your American Family Insurance agent to learn more about adding personal injury insurance to your homeowners insurance policy. Want an easy way to access your insurance information? Log in or sign up for My Account, where you can view your insurance info, file a claim, pay your bills and much more. Even better? You can do it all from the MyAmFam app. Download it today.


      


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    What Is Homeowners Liability Insurance?

    Accidents happen, and as a homeowner, you, your children or your pets can be held responsible for injuries to people in or outside your home or damage to other people’s property. The good news is your policy can give you financial protection against covered liability claims.

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    What Personal Liability Insurance Covers*

    Your homeowners insurance provides both property and liability protection. Property insurance protects the structure of your home (dwelling coverage) and your belongings (personal property coverage). And personal liability coverage protects you if you’re legally responsible for damage to someone’s property, or if you accidentally injure someone whether you’re at home or away from it.

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    Injury on Your Property

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    Negligent Acts of Children and Others

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    Dog Bites

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    What Personal Liability Insurance Doesn’t Cover

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    Also, if you or a family member intentionally cause harm to someone, you won’t be able to depend on your personal liability coverage for financial protection.

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    Home Insurance Liability Coverage Amounts*

    Like any coverage, your personal liability coverage offers protection up to your policy limit, which is the capped amount your insurance company pays in the event of a claim. You’ll choose your coverage limit when creating your policy, and any expense that extends beyond your limit will come out of your pocket. The good news is you can increase your coverage.

    For extra protection and added peace of mind, umbrella insurance provides an additional layer of liability coverage above your policy limit, so you won’t have to dig into your own savings in the event of a substantial claim.

    For example, we mentioned that personal liability coverage helps cover you if your dog injures someone — which is an important protection to have in place. But a dog bite claim can often surpass your personal liability coverage limit. Having umbrella insurance provides an additional layer of protection should a claim exceed the liability limits you selected within your homeowners policy and helps protect your assets.

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    Remember, costs can vary depending on the amount of coverage you’re looking for. That’s why your best bet is to connect with your American Family agent to discuss policy amounts and limits — they’ll help customize your policy to ensure you have the right limits for your unique needs.

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    Why Did My Homeowners Insurance Go Up?

    A lot of thought went into the purchase of your home. Its amenities, location, and overall design played an important role when you made the decision to place an offer on the house. Many of those same traits and features are referenced when an insurance company puts together a homeowners quote. And there are other key factors that they use to determine the cost of your premium.

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