How to Save Money on Auto Insurance?

Auto insurance rates can vary and even shift based on your current situation, and the steps that you have taken to reduce it. If you’re a bit cautious, and responsible, it is possible to get auto insurance at a lower rate.

So, by staying proactive and well informed, there are many effective ways to save on auto insurance without sacrificing coverage. In this guide you will learn 11 practical and proven strategies to save on auto insurance.

Whether you’re a new driver, or an experienced one, these tips will help you save a significant amount on auto insurance while securing the best coverage within your budget.

11 Effective Tips to Save Money on Auto Insurance in Michigan

If you’re not careful, your auto insurance rate can increase significantly which can make it difficult to afford. Or at least you would have to spend a substantial budget which isn’t entirely necessary either.

When it comes to auto insurance rates, Michigan happens to be one of the most expensive states for auto insurance. According to Governor Whitmer, drivers in Michigan pay 81% more than the national average. On average drivers in Michigan spend $1360 on minimum coverage, and $3,643 a year on full coverage.

Although auto insurance rates are significantly higher in Michigan, there are various ways you can reduce your auto insurance rate and save a substantial amount. Here are 11 effective tips to save money on auto insurance in Michigan.

Explore and Find Auto Insurance Companies Nearby

There are tons of auto insurance companies out there, but it’s crucial to find the ones that are reliable, and affordable. While exploring auto insurance companies, it is also essential to find the ones that provide coverage in your location.

So, that’s why it’s important to search, and carefully examine multiple auto insurance companies nearby. You can visit their website to see what type of auto insurance services they provide.

Moreover, you should explore third party platforms like Google Maps, Reddit, Quora and public forums to see customer reviews to gain insights on their reputation and service quality.

If you’re looking for a reliable auto insurance agency in Michigan, you should consider checking our insurance solutions online. Additionally, if you’re interested in consulting with us in-person, please visit our regional offices located in Flint, Saginaw and Mt Pleasant.

Shortlist 3 to 5 Auto Insurance Companies

After going through multiple auto insurance company websites, and analyzing customer reviews, shortlist the best 3 to 5 auto insurance companies of your choice. Once you do so, carefully analyze and compare these insurers.

Start by comparing which insurance companies are more reliable especially in terms of processing claims and providing compensation. Prioritize the insurers that have a quick, easy, and smooth insurance claims process. After that compare their rates, prioritize shortlisting insurers that offer the cheapest and the most affordable insurance premiums within your budget.

Contact the Shortlisted Insurers and Negotiate

In most cases, it may not be possible for you to know your exact insurance rate without consulting with the insurance companies. So, you should contact the insurers that you have shortlisted to get a quote.

Compare the quotes, and now it’s your turn to bid, and by now you also have one or two preferred insurers. Call them and negotiate the insurance rate. If another insurance company is offering a lower rate, you can mention that while negotiating with the other insurer.

Once you have mutually reached an agreement on the insurance premium, the insurance agent will guide you through the registration, and payment process to finalize and activate your auto insurance.

Maintain or Improve Your Driving Records

If you have a good driving record, that’s excellent, you should maintain it as it will help you get cheaper rates, and attractive discounts for your auto insurance. On the other hand, if you have an average or poor driving record with traffic violations such as speeding tickets, fines for reckless driving, license suspension, and other legal charges then your insurance rate can increase significantly.

So, that’s why it’s crucial for you to take the first step by improving and maintaining safe driving practices. One of the most crucial factors for determining your insurance rate is your driving record.

Based on it, insurance companies evaluate whether you’re safe or risky to insure. And that’s why it’s crucial to maintain your driving records especially if you want to save on auto insurance rates.

Join Defensive Driving Course

If you have a poor driving record, or if you’re simply trying to improve and learn safe driving practices, it’s a great step to join a defensive driving course. Attending and completing a defensive driving course shows your effort, commitment and sincerity to improve and practice safe driving practices.

Most insurers value these efforts, and this can help you negotiate with your preferred insurer to lower your auto insurance rate. Remember, if you want to save on auto insurance, just completing the defensive driving course isn’t enough, it’s essential for you to apply safe driving practices on the road.

Opt for Telematics Insurance

Telematics insurance is also known as usage-based insurance. Unlike other types of auto insurance coverages, the telematics insurance offers a lower rate especially if you have an annual mileage of 7500 miles or less.

So, if you have a good driving record compared to the average driver with a lower annual mile coverage then you can save a significant amount on your auto insurance premiums.

By getting the telematics insurance coverage you can save up to 40% of the standard auto insurance rate. If you don’t drive your car too frequently, or if it’s below 7500 per year, then you should definitely consider adding telematics insurance in your auto insurance policy.

Seek Discounts and Bundle Offers

Although insurance agents will inform you if you’re eligible for discounts and bundle offers, there are times they may not mention it. Or perhaps you weren’t eligible before while purchasing your auto insurance policy but now you’re.

In this case, you need to be proactive to search and figure out whether you’re currently eligible for discounts and bundle offers. If you’re unsure, you can always call and talk to your insurer to know your eligibility status for discounts and bundle plans.

On the other hand, if you’re switching auto insurers, there’s a high chance that the other insurer will offer you discounts, and bundle offers to influence you to switch. Before switching insurance providers based on discounts and other cost saving schemes, make sure to thoroughly check whether the other insurer is reliable.

If so, then you can switch insurers. Alternatively, you can also negotiate with your current insurer to see if you can score a better deal.

Go for Supplemental Spouse Auto Insurance

If you’re married, then you can save up on auto insurance by acquiring supplemental spouse auto insurance. With the supplemental spouse auto insurance, you can either opt for a joint or separate insurance policy with your spouse.

While the joint spouse auto insurance can help you and your partner save more, you can still save up a significant amount by getting the separate policy. From the perspective of an insurer, they are selling one policy to a couple sharing the same car(s), and household. So, on that note, they are typically earning more compared to selling other auto insurance policies.

Usually, married couples are often more responsible, and tend to get less involved in accidents, so that’s why insurance policies such as supplemental spouse auto insurance have a relatively cheaper rate compared to other auto insurance policies.

Join a Family or Household Policy

If you want to save up on your auto insurance rate, one of the smartest ways is to bundle up policies. The most effective way of doing that is to either join an existing auto insurance policy of a family member within the same household, or you can add them to your policy.

For instance, if your age is between 16 and 18 years, you will have to pay a much higher auto insurance rate. Currently the national average auto insurance rate for a 16-year-old in Michigan is $5,069 for full coverage and $1,544 for minimum coverage. Similarly, for 18-year-old drivers, it is $4,365 for full coverage and $1,305 for minimum coverage.

Based on a recent study, a 16-year-old driver’s auto insurance rate can even go up to $7,149 a year for full coverage but if they join their parent’s policy then it can significantly go down to $4,303/year for the same full insurance coverage. So, if your child joins your policy then they are saving up to $2,846 per year on auto insurance.

Similarly, you can go for multi-policy auto insurance for family members within the same household for cheaper rates.

Consider Increasing Your Deductibles

Insurance deductibles is an amount that you agree to pay out of pocket before your insurer begins to compensate their share from your coverage. Here’s an example to help you better understand if you’re not sure what insurance deductibles are.

Let’s say you end up in a car accident, and you have an incurred cost of $20,000, but you’ve agreed to a deductible of $2,000. So, you need to pay the $2,000 first out of pocket and your insurer will compensate the remaining $18,000 to cover various costs due to the accident.

The more you increase your insurance deductibles, the less your insurer needs to invest to cover your auto insurance claim. So, that’s why increasing your insurance deductible is a smart way of saving money on auto insurance.

However, it’s crucial to make a well calculated decision before increasing your deductibles as that puts you under substantial risk of a higher out of pocket expense.

Switch to Another Insurer

Sometimes the most effective way to save on auto insurance is to switch to another insurer. There are some insurers that increase insurance premiums right after the first year. Or due to some changes in their policies, this insurer may increase its insurance rate for your auto insurance policy.

So, by switching to another insurer, you may get higher coverage at a cheaper and more affordable rate.  If your current insurance provider is charging you a premium that’s relatively and significantly higher than other insurers, the smart choice would be shift to another insurer that provides the same or a better coverage at a cheaper rate.

According to a recent survey, Americans who switched auto insurers saved 63% to 92%. On average the least amount of savings is at least $100 per policyholder. Based on the data, it’s proven that switching insurers can help you save money on auto insurance.

The Bottom Line

If you read this far, by now you’re already aware of 11 different ways to save on auto insurance. Based on your current situation, if you follow these tips, you can significantly decrease your auto insurance premiums and save money.

Regardless, it’s not always possible to significantly reduce auto insurance rates as there are several factors that influence your auto insurance premiums. Sometimes it can get confusing, especially when you’re dealing with a situation that you’re unaware of, or there are complications that need to be addressed first.

So, if you need help saving money on auto insurance, or if you’re on the verge of switching insurance providers, please contact us to book a free quote and consultation to talk to an auto insurance expert.

FAQs

How can a person save money on auto insurance?

There are many ways to save money on auto insurance which includes searching and comparing different auto insurers nearby, shortlisting the best 3 to 5 insurers, negotiating with shortlisted insurers, maintaining/improving your driving records, enrolling in a defensive driving course, considering telematics/usage-based insurance, seeking discounts, bundle offers, and more.  

Can I ask my insurance to lower rates?

You can always ask your insurer to lower rates, but that can only be done before your policy starts, or while it’s being renewed. Also, it depends on your insurer whether they agree to reduce your auto insurance rates.  

Why is my auto insurance so high?

Auto insurance rate mainly depends on location, age and various other individual factors such as driving records, insurance claims history, license status, bundling up or adding new drivers to your policy and more. So, based on all or either of these factors your auto insurance rate can significantly increase.