Understanding Car Insurance Costs and Discounts
How much is car insurance?
How much does car insurance cost? The answer to that question depends on a number of factors, including the state in which you reside. The average national cost of auto coverage is $935.90 per year. However, within this is a wide range. For example, in South Carolina the average annual premium cost is around $650. However, in New Jersey the average is almost $1,310 a year. Additionally, costs can be affected by other details, such as your driving history, age, gender, vehicle, neighborhood and more.
How to Lower Your Car Insurance Premiums
Although car insurance can add up, it does not have to be exorbitantly expensive. You have multiple ways to lower your car insurance premiums, depending on your company and plan. However, it does require a bit of legwork. You may be able to lower your insurance premiums by following techniques such as:
- Comparing quotes and shopping around. You can do this, even if you have a current policy.
- Bundling your car insurance with other insurance, such as homeowners insurance.
- Raising your deductibles to lower your monthly costs. Beware: You will have to pay more fees in the event of an accident.
- Choosing your car wisely. Older cars may not be worth insuring fully, while newer cars can bring costs down due to their advanced safety features.
- Checking your driving record for errors. Mistakes on your report may be dinging your history and raising your premiums for no reason at all.
- Staying on top of your credit score. In the vast majority of states, a low score can raise premiums.
- Taking a traffic school course to remove points or keep them off your license.
Auto Insurance Discounts
There are numerous discount car insurance options available to drivers who know how to take advantage of them. From an accident-free history to enrolling in a drivers ed course, companies have come up with ways to lower the prices for a majority of customers. Discounts on car insurance that are commonly offered by companies across states include:
- Accident-free: Drivers who maintain an accident-free history for multiple years, typically at least three, may be able to receive a discount on their premiums.
- Affinity member: Many organizations, from alumni associations to professional organizations to sports teams, offer discount car insurance for members through a particular insurer.
- Anti-theft system: Cars that come with modern anti-theft systems are stolen much less often. Therefore, insurers offer may offer a discount for such systems to encourage drivers to adopt them.
- Good driver: Many companies are implementing technology, such as phones or devices installed in vehicles to track driving habits, and offer discounts for good practices. Apps can track whether the driver brakes hard, speeds, takes sharp turns and uses the phone while driving, then issue the driving a report card and advice on how to improve. The good driver discount options is also sometimes available to those who maintain clean records. But make sure you read the fine print so you know what personal information will be collected and how it will be used and shared.
- Defensive driving: Drivers who complete a defensive driving course approved by their insurance company or state DMV may be able to get discounted car insurance rates.
- Drivers ed: Young drivers, typically younger than 21, who complete a drivers ed course may be able to receive a discount on their car insurance.
- Good student discount: Students under 25 in high school or college with a GPA equivalent to the grade of a “B” or higher may receive discounts on their insurance. They may need to supply a report card or transcript annually to prove they qualify.
- Federal employee: In some states, federal employees may be eligible for a federal discount on their insurance.
- Military: In some states, companies can offer military members discounts on car insurance rates. Additionally, some companies offer steep emergency deployment discounts to help military families.
- Multi-vehicle: A majority of insurance companies offer discounts on car insurance for families that bundle multiple cars into one plan.
- Policy bundle: Many major insurance companies offer discounts for people who receive multiple policies from one company, such as homeowners insurance and auto insurance.
Factors That May Increase Your Insurance Prices
You may be saddled with high risk insurance prices if you have a habit of getting into accidents and accumulating traffic tickets. Insurance companies regularly examine your driving history to determine if they need to raise your rates. Numerous dings on your record could make prices soar.
How much does insurance go up after an accident? Rates can double in the years immediately following an accident. In some states, rates can jump up as high as 76 percent after filing a claim. Insurance also goes up after receiving speeding tickets and other moving violation tickets. Parking tickets and other non-moving violations rarely go on your drivers history, which means they do not affect your rates directly.
However, in many municipalities, unpaid tickets will negatively affect your credit score. And in a majority of states, your credit score does impact your premiums. Therefore, it is important to keep an eye on your credit score – and avoid accumulating debts – in order to keep your premiums from rising.