7 Warning Signs You're Paying Too Much for Car Insurance

INSURANCE - CAR INSURANCE
Avoiding these mistakes can help you save money on auto coverage.
Updated Feb. 6, 2023
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Car insurance can be expensive, but you may be paying even more than you need to.

When was the last time you considered cost-saving changes to your policy, or tried to find more affordable auto insurance coverage? Your policy could be outdated, and there might be better options available.

Go through your policy and look for any of these warning signs that you might be paying too much.

You haven't shopped around for a new policy lately

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In a busy world, comparing insurance quotes is probably the last thing on your mind. It’s easier to simply renew your policy automatically.

But that can be a big mistake. Getting quotes from multiple insurers is one of the best — and easiest — ways to quickly cut your insurance costs. There is a good chance another insurer offers the coverage you need at a better price than what you pay now.

You haven't updated your current insurer about life changes

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Things can change fast in life. Perhaps you are working from home now, and drive less than you did when commuting to an office. Or maybe your teen has grown up and no longer needs to remain on your insurance policy.

If so, let the insurer know about these changes. They could save you money.

You're not enrolled in a tracking program

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Insurance companies often offer programs that give you the chance to save money if you agree to let the insurer track your driving habits.

For example, you might earn a discount for driving safely, or for driving fewer miles than the average driver. If you are comfortable having your insurer track your driving, ask about these programs and find out how much you can save.

You haven't checked on potential discounts

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There are many different ways to qualify for discounts your insurance company offers. So, give your insurer a call and see how you might boost your savings account by keeping some extra cash in your wallet.

Insurance companies may knock down the cost of your premiums if you insure multiple cars on the same policy, remain with the insurer over a long period, or have a child who earns good grades, for example.

You're not enrolled in money-saving billing options

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Signing up for your insurer’s auto-pay system can save you cash. When you agree to do this, your policy will automatically renew, with the payment coming straight out of your bank account or going to your credit card.

Insurers often offer a discount to policyholders who agree to use auto-pay. Some insurers also might offer a discount to those who sign up for paperless billing.

Your deductible is too low

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Many insurance companies will charge you less money in premiums if you agree to raise your deductible. For example, raising your deductible from $500 to $1,000 could net you a significant discount.

Before choosing this option, make sure you would have enough cash to pay the deductible in the event of a claim. If you cannot afford the higher deductible, it does not make sense to agree to it.

You are not bundling coverage

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A great way to save money is to bundle your auto insurance with other coverage. Perhaps you have a homeowners or renters insurance policy with a different company. You also might have policies with another insurance provider that cover other vehicles like a motorcycle or boat.

Insuring all these things with one company might get you a discount. Check with your auto insurance company to see what types of other insurance they offer and how purchasing all your policies with one insurer might save you cash.

Bottom line

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Car insurance can be a big expense for drivers, but there are ways to save money. Even minor adjustments in coverage can trim your bill.

Revisit your policies on a regular basis to make sure you’re getting the most out of your coverage. And look for other ways to cut your car-related costs, such as using one of the top credit cards for gas that can earn you cash back or other rewards.

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Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.

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