Car insurance is one of those necessary bills that you know you have to pay, but it pains you every time you do. It's easy to settle on the first plan you find, but you could be saving money on your insurance costs if you know what you're doing. Seth Birnbaum, CEO and cofounder of EverQuote [1],
offered us some easy tips on ways to cut auto insurance costs so that you're saving cash and staying safe while on the road [2].
- Ask for discounts! Ask your insurance agent about any available discounts and markdowns — you may be surprised what qualifies you for one. "Sometimes the most minute details — like involvement with alumni groups — can give you discounts," said Birnbaum. "Recent college grads can get several discounts, and students who maintain a "B" average or better or were on the honor roll/Dean's list can save anywhere from five to 15 percent."
- Shop around for the right provider. Websites can give you personalized price quotes based on your background and needs. EverQuote is a great one-stop shop for receiving different quotes from providers, says Birnbaum.
- Be a safe driver. Accidents can increase the price of your car insurance, so it's important to practice safe driving at all times. Birnbaum also encourages drivers to download safe driving apps like EverDrive [4] to help users become better drivers and avoid accidents and violations that will raise insurance premiums. "Due to the behavioral awareness with accurate feedback and tips and incentives such as leaderboards and rewards in the EverDrive app, driving quality improved by 30 percent in the speeding, harsh braking, acceleration, and cornering categories," said Birnbaum.
- Don't use your cell phone while driving. Insurance premiums can go up due to distracted driving. According to data from EverDrive, 61 percent of drivers admitted to using their cellphones on some drives, most drives, or every drive.
- Go paperless. Some car insurance providers will give discounts to customers who sign up for electronic bills instead of paper ones, so check to see if that options applies to your plan and take advantage of it if it does.
- Test out usage-based insurance (UBI) or pay-as-you-drive (PAYD) insurance. "It could save you money if your state offers it," says Birnbaum. "For example, earlier this year Montana passed a bill that requires all insurance companies to set auto insurance rates based on a motorist's driving record, not on other factors like education level."
- Build your credit score, avoid missed payments, and stick to a monthly budget. "A 2015 Consumer Reports study found that the average difference paid by those with a 'good' score versus those with the 'best' score was $214 per year," Birnbaum said. Sticking to a budget and making payments on time can reduce your insurance costs significantly.