Everything You Need to Know About Car Insurance—Including How to Lower Your Bill

If you want to drive a car legally in the United States, you have to have car insurance. It’s as simple as that.

The average American has to scramble to set aside an extra $125 each month to legally take his or her set of wheels out on the road, as citizens pay roughly $1,500 each year on auto insurance. For most people, that’s quite a chunk of change, especially considering the average driver files a collision claim once every 18 years and a comprehensive claim once every decade.

Still, car insurance is one of those unavoidable necessities in life. Of course, some Americans who live in urban areas or close to bus stops or train stations might choose to take public transportation instead of deciding they need to buy and drive their own cars.

But while public transportation is cheaper, more environmentally friendly, and helps reduce traffic congestion, the fact is that professional life in the US has rendered car ownership a near-necessity for most of us.

Location, Location, Location

The state you live in can play a huge role in how your car insurance bill is priced. Let’s take a look at the areas with the highest average insurance rates:

  • Michigan – $2,551
  • West Virginia – $2,518
  • Georgia – $2,201
  • Washington, D.C. – $2,127
  • Rhode Island – $2,020
  • And the states with the lowest average bills:
  • Ohio – $926
  • Maine – $964
  • New Hampshire – $983
  • Idaho – $1,053
  • Iowa – $1,058

So where does your bill fit in?

If you’re looking at those numbers and wondering why you’re paying too much, it might be time to figure out some tips and tricks you can employ in order to reduce your insurance premium. The good news is that, just like there are those people who figure out how to make the most of company giveaways, credit card rewards and travel points, there are those who’ve figured out how to apply the same tactics to car insurance bills.

Here’s How You Can Lower Your Car Insurance Bill

At the end of the month, it can be difficult to come up with the money to pay off all your bills in full and on time. The good news is that you have a lot of options at your disposal when it comes to reducing your car insurance bill.

With that in mind, let’s take a look at some things to consider:

Enhancing your car’s safety features: In the event that an accident occurs between two insured drivers, insurance companies will have to battle between each other to figure out who is responsible for medical costs and who is responsible for physical damage to the cars and any nearby property.

Next time you buy a car, you might want to pay closer attention to its security features; certain equipment can snag you additional discounts on your insurance. Simply put, safer vehicles constitute a less severe risk for insurance providers.

Here is how some safety features can reduce your insurance rate:

Driver-side air bags – 25% off personal injury insurance

Full-front seat air bags – 40% off personal injury insurance

Anti-lock brakes – 5% off collision insurance

Anti-theft system – 5-30% off comprehensive coverage

Daytime running lights – 5% discount

Being a good driver. If you were trying to figure out how much to charge someone to insure their car, chances are you’d be more eager to vouch for someone who has a flawless driving record compared to someone who gets into an accident every-other day.

Logically, it makes sense: If you’ve been a good driver for the past five years—i.e., you haven’t been in any accidents (or at least any that you reported to your insurance)—you can benefit from up to a 26 percent reduction in your insurance rate.

Miscellaneous tips and tricks. Don’t think of it as gaming the system—it’s not. By knowing what kinds of benefits are available to you and making the right moves to attain as many of them as you see fit, there’s a good chance you’ll be able to realize even more cost savings. Consider the following:

You can save up to 15 percent on your insurance bill when you combine your auto and homeowner policies.

The less you’re on the road, the less likely you’ll get into an accident. There are discounts available—up to 11 percent for the average customer—for those who drive fewer than 7,000, 10,000 or 12,500 miles each year.

Like your insurance and want to keep it? Well, if you renew your policy seven to 10 days ahead of time, you might enjoy up to an 8 percent savings on your bill.

It’s worth noting that these tricks aren’t the only ones you can employ to reduce your yearly car insurance bill. In fact, you can save by being a loyal customer, setting up automatic payments, and owning a home, too.

Additionally, you can lower your bill by paying to repair minor accidents out of your pocket, getting married, maintaining a good credit score, and paying your entire premium up front instead of in installments over the course of the year.

And who knows? If you do a little bit of research, you might turn up even more discounts in addition to what’s here. For more ways to save money on car insurance, check out this infographic video from CJ Pony Parts.


Everything You Need to Know About Car Insurance—Including How to Lower Your Bill — 1 Comment

  1. And here was me thinking we paid heaps in Australia! We have compulsory vehicle registration, which is about $650 here in Victoria and includes things like 3rd party insurance (which covers the medical costs if you or another party is injured in an accident).

    Insurance though, is up to the individual, and you can get anything from ‘fire & theft’ up to fully comprehensive.

    We pay a *lot* more for our cars though…

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