Three ways to get better car insurance rates

We all want to get a great deal on car insurance. For most of us (myself included), monthly car insurance payments are the expense we get the least amount of satisfaction from, and which feels the most out of our control.

It doesn’t have to be, and there are many things we can control which will help lower this monthly bill as much as possible. We’ll cover the three simplest ways.

Take steps to improve your credit

Love it or hate it, credit is a fact of modern financial life. Credit plays a major role in determining the cost of your insurance rates. For many people, their credit score is something they would rather ignore, and I totally get that. Personally, I think credit disproportionately affects the people who can least afford the higher costs associated with lower credit scores. Nevertheless, improving your credit will help bring down the cost of your insurance.

Credit scores ebb and flow, so if you monitor your credit regularly, a good time to shop for new insurance is when you notice your score increasing. Many people use small windfalls or tax returns to pay old bills, or pay down credit card bills. When this happens, and if your score suddenly improves, promptly shop your insurance. You might be surprised at the better quotes you get.

Protect your good driving record

Officer writing a speeding ticket
—Slow Down!

Perhaps the one thing you can do that is absolutely within your control is to practice safer driving habits. It’s no surprise that tickets and/or accidents affect your insurance. In the current market, one speeding ticket or even a small at fault accident can significantly raise your rates. How long this surcharge lasts varies, but on average it’s about three years.

We work with clients whom have multiple tickets or accidents, and are still able to find relatively competitive rates. It’s not that you cant find better rates with a few tickets or an accident, but your unnecessarily surcharging your own insurance price with even minor traffic violations.

Insure better, and shop less often

Insurance companies use all sorts of data points when pricing a policy. Surprisingly, we’re often able to get better rates for our customers whom carry higher coverage limits, or have been with their current carrier for a longer amount of time.

Many insurance companies take the view that people whom carry higher liability limits, are statistically more cautious and safer drivers than those that take the absolute minimum coverage. For example, Instead of selecting a state minimum liability limit $25,000/$50,000 in Washington or Idaho, select a limit of $100,000/$300,000, or even $250,000/$500,000. This way, when you go to shop your policy again, you likely will be eligible for a reduced rate. Often when we quote someone, the price we can get them if their current policy has better liability limits, is cheaper than if they only carried the state minimum. It’s weird but trust me, its a thing.

Many financial advisors, and even insurance professionals suggest that you should shop your insurance every year. While we agree that shopping your insurance regularly is a great way to find the best deal, it’s also a catch-22. The time you’ve been insured with your current company often impacts the rates you get quoted when shopping. It’s cheaper for insurance companies to retain the customers they already have, than it is to find new customers. Carriers figure that someone who’s been loyal to their current company for a couple years or more, are better business, and usually qualify for better rates.

Theres many factors at play including other action items you can take to reduce your rates, our goal is to help you understand the simplest steps possible to get better insurance rates.

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