When it comes to car insurance, saving money without sacrificing coverage is very important for many drivers. Fortunately, most insurance providers offer various limits to help you lower your premiums. Unfortunately, many people are unaware of these limits and end up paying more than they need to. In this article, we will break down the top 5 car insurance limits you ought to get to help you save money.
1. Safe Driver Discount
One of the most common and valuable discounts you can get is the Safe Driver Discount. This discount rewards drivers who have kept a clean driving record. If you’ve been accident-free and haven’t had any moving violations for a set number of years, you may qualify for a safe driver discount.
Why It’s Important:
Insurance companies want to reward drivers who are less likely to get into accidents because it reduces the insurer’s risk. Safe drivers present a lower risk for claims, so the insurance company is willing to offer them a lower rate.
How to Qualify:
- No accidents or moving violations for a set period (typically 3-5 years).
- Some insurers may offer this discount for drivers who have completed defensive driving courses.
- You may qualify if you’re a new driver with a clean record since getting your license.
How Much Can You Save:
- You can typically save up to 10-20% off your premium by maintaining a clean driving record.
2. Multi-Policy Discount
Another great money-saving tip for your car insurance is by bundling your policies. Many insurers offer multi-policy discounts when you combine your car insurance with other types of coverage, such as home insurance, renters insurance, or life insurance.
Why It’s Important:
Insurance companies reward loyal customers who have multiple policies with the same insurer. By bundling your insurance, you not only make life easier by dealing with one provider, but you also get a significant discount.
How to Qualify:
- Combine multiple insurance policies with the same provider, such as auto and home insurance.
- Some insurers will offer discounts if you bundle car insurance with life or renters insurance as well.
How Much Can You Save:
- Multi-policy discounts can save you anywhere from 5% to 25%, depending on the insurer and the number of policies you bundle.
3. Good Student Discount
If you’re a student, especially one in high school or college, you may qualify for a Good Student Discount. Insurers believe that students who perform well academically are more responsible and therefore safer drivers.
Why It’s Important:
Students are often categorized as high-risk drivers due to their lack of experience. However, a good student discount helps to offset this risk. Insurance companies often offer this discount to encourage students to stay safe on the road and perform well academically.
How to Qualify:
- Typically, you need to be a full-time student (under the age of 25).
- Maintain a GPA of 3.0 or higher (though some insurers may accept a GPA of 2.5 or higher).
- Some insurers may offer this discount even if you’re taking a part-time or online class as long as you meet the GPA requirement.
How Much Can You Save:
- The good student discount typically offers savings between 5% and 15%, depending on your insurer.
4. Low Mileage Discount
If you don’t drive your car very much, you may qualify for a Low Mileage Discount. This discount is given to drivers who don’t accumulate a lot of miles annually. Since insurance companies consider lower mileage drivers to be safer (because they’re on the road less often), they offer this discount to save on premiums.
Why It’s Important:
The more you drive, the more likely you are to get into an accident. Since low-mileage drivers are on the road less frequently, they are statistically less likely to be involved in an accident or file a claim. As a result, insurers will lower your rates.
How to Qualify:
- You typically need to drive fewer than 7,500-10,000 miles per year.
- Some insurers may require you to provide proof of mileage, such as an odometer reading or usage tracking through a telematics device.
How Much Can You Save:
- The discount usually ranges from 5% to 15%, depending on the insurer and the amount of mileage you drive annually.
5. Vehicle Safety Feature Discount
Many modern vehicles come equipped with advanced safety features that can significantly reduce the risk of accidents. Insurers offer a Vehicle Safety Feature Discount for cars with features such as anti-lock brakes, airbags, automatic emergency braking, and anti-theft devices.
Why It’s Important:
Cars with safety features are less likely to be involved in accidents or be stolen. If your car has these features, insurance companies will see it as a lower risk, making it eligible for a discount. Additionally, cars with advanced safety features often cost less to repair after an accident.
How to Qualify:
- Your car must be equipped with certain safety features, such as:
- Anti-lock brakes
- Airbags (driver, passenger, side)
- Anti-theft systems (alarms, GPS tracking)
- Backup cameras
- Lane departure warning
- Automatic emergency braking
How Much Can You Save:
- The discount typically ranges from 5% to 15%, but it could be higher depending on how many safety features your vehicle has.
Additional Tips to Maximize Your Savings on Car Insurance
Aside from the primary limits, there are a few other tips you can use to lower your car insurance premiums:
1. Increase Your Deductible
One way to lower your premium is by choosing a higher deductible. The deductible is the amount you pay out of pocket before your insurance covers the rest of the cost. By increasing your deductible, you lower your premium, but make sure you can afford the higher out-of-pocket cost if you need to file a claim.
2. Shop Around
Don’t settle for the first quote you get. Shopping around and comparing quotes from different insurers is essential to finding the best deal. Use online comparison tools to get a side-by-side look at multiple options.
3. Maintain a Good Credit Score
In many states, insurers use your credit score as a factor in determining your premium. A higher credit score can help you qualify for lower rates, so it’s important to manage your credit responsibly.
4. Take a Defensive Driving Course
Many insurers offer discounts to drivers who complete a defensive driving course. This course teaches you how to avoid accidents and respond to dangerous driving conditions. Even if you’re a seasoned driver, taking a refresher course can lower your rates.
5. Avoid Unnecessary Coverage
Review your coverage regularly to ensure you aren’t paying for unnecessary coverage. For example, if your car is older and has a low market value, you might not need comprehensive or collision coverage. Eliminating these coverages can save you money, but make sure you’re still adequately protected.
Final Thoughts: Saving on Car Insurance
Car insurance is a significant expense for many drivers, but by taking advantage of available discounts, you can save a considerable amount on your premiums. Whether you’re a safe driver, a student, or someone with a car that’s equipped with advanced safety features, there are plenty of ways to reduce your car insurance costs.
Start by talking to your insurance provider and asking about all the discounts available to you. Review your policy regularly and compare quotes from different providers to ensure you’re getting the best deal. By doing so, you’ll not only protect yourself and your car, but you’ll also keep more money in your pocket.