Average Car Insurance

5 Ways the Middle Class Can Save Money on Car Insurance

Nearly everyone is required by law to carry car insurance, but not everyone is required to carry the same types of coverage. Middle class families often find that car insurance becomes a real burden as children grow and begin to drive. Whether the middle class driver is single, has a family or is paying for young drivers, there are several ways to save on car insurance while still meeting the state’s minimum levels of insurance.

1. Increase the deductible: Some lenders require younger drivers to maintain a $500 deductible because they fear that a twenty-something driver will be unable to pay the first $1,000 or $1,500 for repairs in the case of an insured accident. Older, more financially established drivers often can increase the deductible to $1,000 or $1,500, even on a car that is not fully paid for. When the driver owns the insured car outright, then he can choose any level of deductible that his insurance company will allow.
2. Drive safely: Nothing increases insurance rates more effectively than a poor driving record. An accident in which the insured driver is at fault increases rates right away, but traffic violations increase car insurance bills too. Many states operate on a point system, in which a speeding ticket may be three points, or a DUI 15 points. In point system states, a driver that accumulates a specific number of points may be transferred to the state’s high-risk insurance pool. Getting out of that pool can be difficult, as points persist for several years. Staying out of that pool is easy — you can do it by simply obeying traffic laws and maintaining a stellar driving record.
3. Don’t carry unnecessary coverage: Many people who have all of the coverage required by a lender fail to adjust their coverage after paying off the vehicle. All lenders require financed cars to be protected by comprehensive insurance. Once the car is paid for, the driver may want to adjust that coverage. A newer model vehicle is worth carrying comprehensive coverage on, but one that is approaching 10 years old probably is not. Convenience items such as roadside assistance and rental car payments probably cost more through the car insurance company than through other types of vendors.
4. Get young drivers their own policy: Where there are car-owning students in the home, some insurance companies will allow parents to exclude young drivers from the parents’ cars. Most will not, however, and require that each vehicle in the family be insured for every licensed driver in the family. Some companies will allow parents to put car-owning young drivers on their own policy so that parents have to pay the higher rates only on the car that the young driver uses. Parents will have to ensure that the young driver never drives a parent’s car, however.
5. Take advantage of all available discounts: Most car insurance companies offer an array of discounts. A popular one is the honor roll discount for good grades, which reduces the rates charged for students in the home. Another is for older drivers, which is a discount for those over the age of 55 who take a safe driving class targeting older drivers. Virtually all companies offer multi-vehicle discounts to encourage households to insure all of their vehicles with the same company. Specific discounts vary by state and by company, so the driver will need to specifically ask for any discounts that may be available.