If you drive, you likely need car insurance. It should be a line item in your budget. But this is an expense that can be reduced. Unfortunately, it’s not as simple as switching to GEICO. There are so many factors that go into bringing down the cost of your car insurance. If you want to save way more money on your car insurance, you want to consider your driving history, taking a defensive driving course, and shopping for car insurance.

Drive Safely

Funny story: My dad taught me how to drive. My mom was way too anxious to take me out when I got my permit. So I learned all the good and bad habits I have from him. A few years ago (so at that point, I’m driving over a decade), he’s in the car with me and he says to me, “You drive like a guy.” Well duh! You’re the guy who taught me to drive.

My dad was very skillful behind the wheel but rules were bent quite often. It wasn’t until I got a few speeding tickets under my belt that I realized that those white signs with the numbers on them weren’t suggestions but limitations. Hence the word speed limit. Getting tickets was a waste of my time and money so I decided I needed to make some adjustments.

When travelling on the highway, if I find that I’m inclined to drive more than 10mph over the speed limit, I set my car on cruise control. The temptation to keep up with everyone else is literally controlled by this feature.

I also stopped driving like the road belonged to me. If someone cuts me off, I no longer take personal offense. I don’t switch lanes obnoxiously like I’m the only person that has to be somewhere.

I’m not saying I do everything right. However, I’m a more conscious and safer driver than I was even just a few short years ago.

Defensive Driving Course

Simply put, defensive driving courses are easily accessible and can save you money on your car insurance. I paid $17.95 in 2018 for a class I did completely online in a few hours.

If you have points on your license, taking the class can remove two points off your license. Otherwise, it will provide a discount on your car insurance. In order to maximize savings, you need to have this done once every two years.

Shopping Around for Car Insurance

The best way to save money on car insurance is to shop around. Most policies last six months, others one year. Every time you’re about to renew, you should check out rates from different companies. Using an independent insurance broker is by far the easiest way to do this. They compare rates from different providers and present them all to you. However, you may be able to find even cheaper rates on your own I found.

Keep It Simple

To make this easy, I keep a cloud document with my husband and I’s violations, accidents, and the date we took defensive driving. I started by getting my driving record aka Motor Vehicle Report (MVR) from the DMV. I only did this once so I could use what was on my record to get this document started. After that, I just keep it updated in real-time.

Insurance companies typically ask about violations and accidents from the last three to five years. As a result, I keep any of these things within the last five years as recent items. Those over five years, I still keep but I mark them old and make the font smaller. This way I know not to pay attention to it.

On this document, my current coverage limits are listed as well as the associated deductible so I can compare the costs using the same numbers across the different providers. You can also just pull up your insurance declaration page for a reference. Put all the different rates and the length of the policies on paper or on this document so you can compare the costs side by side.

I also keep my car’s VIN number on this document. Having all this information in one place makes it SUPER easy to fill out quote forms rather quickly. You also might need the license numbers and expiration dates of every driver on the policy.

Fair warning though: when you fill out car insurance quotes and you give your phone number, you will get many, many phone calls. I always put a fake number because who has time for that.

Adjusting Your Coverage

If you increase your deductibles, you will decrease your monthly payment. An insurance deductible is the amount of money you have to come out of pocket before your insurance company starts to pay. HOWEVER, you should only do this if you have the money to pay up to that deductible if an accident were to occur. So if you have a lot of savings, try to keep your deductible low. You’ll have higher monthly payments but you won’t be ruined by bills you can’t afford to pay.

If you want to increase your deductible, work on building your emergency savings account. Your emergency fund should have 3-6 months of expenses. If you have that much saved up, you will definitely have enough to cover your deductible if needed. Some may feel more comfortable adding that deductible on top of their initial emergency savings goal. Do what works for you.

Understanding Insurance Points

Not having points on your license doesn’t guarantee low insurance costs. Auto insurance companies have their own algorithm for deciding how risky you are. These are called insurance points and they determine your rates. They don’t just look at your driving history. It looks at other things such as your credit score, your claims history, where you live, and even the car you choose to drive.

The best way to keep your insurance points down is to drive safely and practice defensive driving. As far as I understand it, there’s no way to know how many insurance points you have as different company policies have variations in how they count points. So the best you can do is try to avoid accumulating them to begin with.

To-Do List

• Create and maintain a record on the drivers on your car insurance policy.
• Have every driver take a defensive driving course every two years.
• Shop around for coverage every six months.
• Drive safely! The goal is to keep your driving record as clean as possible.

Also, see if your job or college have affiliations that will provide discounts with certain insurance companies. Finally, if you can manage it, paying for the full 6-12 months upfront is the way to go. It is guaranteed to save you money.

Your turn. What do you do to save money on your car insurance? Share in the comments below.