Drivers can’t legally get behind the wheel without some car insurance, with each state setting its own minimum requirements. These limits tend to be quite low — potentially too low to cover the full cost of severe accidents — but they can still cost drivers hundreds of dollars per year.
This is a challenge for those already struggling with car insurance premiums that have shot up dramatically over the last few years. But settling for low coverage limits isn’t the only way motorists can manage costs.
Here are some additional strategies that could help drivers get the coverage they want at a price they can afford.
Shop around for auto insurance
Shopping around is the best way to find cheap car insurance. Each company has its own proprietary formula for assessing risk and setting premiums, so the only way to know which insurer offers the best deal to a specific person is to get quotes. Most companies have online quote tools, so it only takes a few minutes.
Drivers can save time by gathering important information before seeking quotes, like their driver’s license number, their vehicle identification number (VIN), and the dates of any accidents or traffic violations that occurred within the last three to five years. Most insurers will ask for this information, and some may request Social Security numbers to provide a more accurate quote.
It’s best to shop with three to five top companies before settling on a policy. It’s often possible to save a quote so drivers can come back without reentering their information again.
When comparing options, focus on more than just the premium. Look at the coverage options available, the insurer’s financial strength ratings, and its customer service and claims satisfaction ratings. Checking out auto insurance reviews can help drivers identify key strengths and weaknesses in these areas.
Look into all available discounts
To be clear, more car insurance discounts don’t always lead to the lowest premiums. But they can help. Most car insurance companies automatically apply discounts to drivers’ premiums during the quote process, but there are a few ways drivers can maximize their savings.
First, they can be strategic about which companies they apply with. This is especially helpful for drivers who qualify for unique savings opportunities. For example, some companies offer savings to drivers of hybrid or electric vehicles, while others don’t. Some companies also offer discounts to military members or veterans.
Seeking out these savings could help drivers who qualify for them reduce their premiums more than working with an insurer that doesn’t have these discounts.
Drivers might also want to consider opting into a telematics program if they’re comfortable doing so. These programs usually come with a mobile app or a small device that monitors a driver’s behavior behind the wheel, focusing on things like the speed of acceleration and braking and the times the driver is on the road. They’ve become increasingly popular because they provide a more accurate representation of a driver’s riskiness.
Insurers can’t force drivers to participate in these programs, so they try to incentivize participation by offering an upfront discount. Those who demonstrate consistent, safe driving behavior could qualify for additional discounts down the road.
Raise the deductible
Raising a car insurance policy’s deductible reduces premiums, sometimes significantly. Going from a $200 deductible to a $500 deductible could reduce the cost of collision and comprehensive insurance by 15% to 30%, according to the Insurance Information Institute (III). And opting for a $1,000 deductible could save drivers 40% or more.
The downside is that drivers will have higher out-of-pocket costs in the event of a claim. But this might not be a concern if they can save for the deductible in an emergency fund.
Budget is a limiting factor for most drivers when buying car insurance. But whenever possible, it’s best to purchase more than the minimum coverage to reduce the risk of being found liable for serious damages above and beyond the policy limits.
If the tips here don’t provide the desired level of coverage, purchase as much as possible now and continue to shop for new coverage every six months or so to see if there are more affordable options available.
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