There are two ways to save on car insurance by reducing coverage. First, you can lower your policy limits. The other option is to eliminate unnecessary types of coverage. For example, if you have an old car that isn't worth much, you might consider eliminating collision coverage and comprehensive coverage.
Companies base their rate on a variety of factors, from the type of car you drive to how long it's been insured. Most major insurers offer several discounts designed to help reduce the cost of insuring a teen driver. When choosing car insurance, you can usually choose a deductible, which is the amount of money you would have to pay before the insurance pays the bill in the event of an accident, theft, or other type of damage to the vehicle. On average, drivers without credit pay 67% more for car insurance than drivers with excellent credit, according to the WalletHub analysis.
That's because middle-aged drivers tend to insure newer, nicer cars and begin to include their children in the policy, which increases the average rate for this age range overall. The average auto insurance premium has also become more expensive, increasing by more than 50% over the past 10 years. If your credit rating is good, you could qualify for discounts on your car insurance policy. The cost of car insurance generally declines the most between 18 and 19 years of age, when rates drop by approximately 25% on average.
That's because many auto insurers use their credit rating to assess risk and predict if you're likely to file claims. As a result, simply comparing prices could save a teen driver hundreds of dollars a year on car insurance. The best way to reduce your car insurance premiums is to compare prices between insurers, take advantage of all the discounts you can, and adjust your coverage to fit your budget. The best way to lower your teen's auto insurance rate is to add it to your current insurance policy if you currently have your own and then look for discounts to further reduce the cost.
If your car insurance has gone up, it's important to compare a company that can offer you the lowest rates. If you don't mind having your driving behavior recorded, consider purchasing usage-based or pay-per-mile insurance to reduce car insurance costs. Buying a huge SUV may sound exciting, but insuring a 5,000-pound top-of-the-line vehicle can be more expensive than insuring a small (but safe) lower-cost passenger car. All major insurance companies use a credit-based insurance score to calculate premiums when allowed by law.