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Monday May 16, 2022

Savvy Living

Savvy Senior

How to Save on Auto Insurance

Can you provide any tips to help reduce my auto insurance premiums? I just received notice that I will have a 15% increase on my car insurance and am looking for ways to save.

Unfortunately, auto insurance rates went up significantly over the past year as the pandemic eased and more Americans got back on the roads. But there are plenty of ways to cut your premium. To find out what discounts may be available to you, contact your auto insurer and inquire about options that may benefit you.

Low mileage discount: Most insurers offer discounts to customers who drive limited miles each year, which is usually beneficial to retirees because they do not commute to work every day. These discounts usually kick in when your annual mileage drops below 7,000 or 7,500, which is significantly less than the typical 12,000 miles most Americans drive a year.

Drivers Ed discount: Many states require insurance companies to offer defensive driving discounts between 5% and 15% to drivers who take a refresher course to brush up on their safety skills. These courses cost as little as $20 and can often be taken online.

Monitored driving discount: Many insurance providers offer discounts based on how and when you use your car. To get this, the insurer would provide a small monitoring device that you would place in your car to track things like your acceleration, braking habits, driving speeds, phone use and times you drive. Drivers are rewarded between 10% and 50% for safe driving and for not driving late at night.

In addition, many insurance providers also offer discounts to drivers who do not have any violations or accidents for three or more years.

Membership discounts: Organizations that you belong to can also lower your insurance premium. Insurers offer discounts through professional associations, workers' unions, large employers or membership organizations. You may even qualify for savings based on the college you attended or the fraternity or sorority you belonged to decades ago.

Bundle policies: If your auto policy is issued by a different company from the one insuring your life or home, call each insurer and ask if bundling the policies would be cheaper.

Improve your credit: You may be able to lower your car insurance premium by paying your bills on time and reducing the amount of debt you carry. Insurers look at how their customers manage credit to get an idea of risk when pricing policies. Better rates are given to those with credit scores of 700 or above.

Increase your deductible: While it is not right for everyone, paying a higher deductible could create large savings on your premiums. For example, increasing your deductible from $200 to $500 could reduce the cost of your collision and comprehensive coverage by 15% to 30%. Going to a $1,000 deductible may save you 40% or more. Be aware though, if you are in an accident, you may need to have adequate savings to cover the cost of your deductible.

Consider your car model: If you are shopping for a new vehicle, call for an insurance quote before you decide what to buy. Some vehicles are safer and cost less to repair than others. Insurance companies collect data about each make and model and use it to determine how much to charge customers.

Comparison shop: To find out if your current premium is competitive with what other insurers charge, or to help you look for a different provider you should comparison shop. Online brokerages let you plug in basic details such as your age and your car's make, model and year to compare rates from insurance companies.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

Published December 24, 2021
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