UPDATED: Mar 13, 2020
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In today’s lawsuit-happy world, it’s as important as ever to have quality auto insurance coverage that protects you against the many risks on the roads. One major downside is that auto insurance must be purchased from insurers who are generally publicly traded companies with shareholders who demand profitable quarters and returns on their investments. As such, many individuals will see an increase in their auto insurance rates as the years pass, simply because their insurer needs to make money. In this article, we’ll look at how to avoid an increase in your auto insurance rates through several different means.
Avoid Accidents and Violations at All Costs
The first tip to avoid an increase in your auto insurance rates is pretty apparent: avoid getting in an accident where you are considered the “at fault” party. Accidents generally cost auto insurance companies a small fortune in medical treatment costs, lost wages, car repairs, property damage, and much more. The reason that your insurance is far less than the cost of an accident is that the risk is spread throughout all of your insurer’s clients. If you become one of the clients that cost more than they bring in through auto insurance revenue, your rates will rise to mitigate the increased risk that you bring to the table. Drive as safely as possible and try to stay accident-free!
Another tip along the same lines is to avoid collecting too many moving citations or tickets, such as speeding tickets, reckless driving, or other infractions. Your auto insurance company will generally be keeping tabs on your driving record, and a string of tickets will red-flag you as a driver that may be starting to let things slip a little.
DUI/DWIs Cause Your Insurance Rates to Go Through the Roof
Whatever you do, do not get arrested or cited for driving while under the influence of alcohol or drugs. A DUI will almost always cause your auto insurance rates to skyrocket, and you will undoubtedly lose any safe-driving or other discounts that were applied to your insurance. Without question, insurers look at drivers with DUIs as some of the highest-risk drivers available and will jack up your auto insurance rates accordingly. Your insurer might even decide to drop you for having a DUI conviction – it’s certainly been done in the past.
Raise Your Deductibles (As the Last Resort)
If you notice that your rate is about to rise, one quick fix that can save you a bit of cash on your auto insurance is to raise your deductible amount. This is the amount that you pay out of pocket in the event of an accident, so if you have a $1,000 deductible and get in an accident that creates a $20,000 claim, you will pay the first $1,000 and the insurance company will pick up the rest. This advice is really only useful if you’re able to afford the increased deductible and are typically a safe driver, so use caution when applying an increase.
This tip doesn’t apply to all insurance companies, but with some, it pays to keep a good credit score while you have auto insurance. Insurers will typically keep an eye on their clients’ credit since many individuals tend to avoid their bills or deductible invoices when times are tough. Check with your insurer to see if they watch your credit score and if so, find out how changes will affect your auto insurance rates.
Keep Your Vehicle in Good Shape
It may not sound like a lot of fun, but you can typically avoid an increase in your auto insurance rates by repairing your current car instead of buying a new one when things start to break down. Unless your car is falling apart or has some irreparable damage to the major systems like the transmission or engine, it’s probably cheaper to apply a fix and to squeeze more miles out of it. When you buy a new vehicle, your auto insurance company will take the opportunity to increase your auto insurance rates, simply because your car is now more valuable and will cost more to repair or replace in the event of an accident.
Click here to read our article on vehicle maintenance and insurance rates.
Always Look out for Discounts
Finally, the last tip is to try to obtain rate discounts on your auto insurance to offset any increases that your insurance company is trying to force upon you. If you’ve been with the same insurance company for at least a few years and you have no accidents, you are probably due for a safe-driving discount. You might also be able to get a discount by threatening to leave your car insurance company for another one, but be prepared that your insurer may be ready to call your bluff!
By following the advice and tips in this article and using a little common sense (and luck) you can avoid or offset an increase in your auto insurance rates whenever your insurer decides to enact one. Make sure you stay on top of your insurance rates and pay attention whenever you receive a notice from your insurance company; that letter that you tossed in the recycling may have indicated a rate increase that will automatically be charged to you. Remember: you’re the customer, and the customer is always right! If you are having severe trouble with your auto insurance company, it might be time to find a new one.
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