The most direct way to save is to shop around every year or two

Insurance companies price the same driver differently. One insurer might charge you $1,200 a year while another charges $1,600 for identical coverage. The only way to know what you're actually paying for is to get quotes from at least three companies — and the quotes you got two years ago don't matter, because rates change constantly and companies reprice existing customers regularly.

Most insurers let you get a quote online in 10 to 15 minutes without committing to anything. You'll need your driver's license, vehicle identification number (VIN), and current coverage details if you already have a policy. Write down the quotes and the coverage limits they're offering, because a cheaper quote might come with lower liability limits or a higher deductible.

The second-most direct way is to raise your deductible — the amount you pay out of pocket before insurance kicks in. Moving from a $500 deductible to a $1,000 deductible typically lowers your premium by 10 to 25 percent, depending on your insurer and where you live. This only saves money if you can actually afford to pay that deductible if you have a claim, so be honest about what you have in savings.

Key Takeaways

  • Getting quotes from at least three different insurers every two years is the single most effective way to find lower rates, because the same coverage costs different amounts at different companies.
  • Raising your deductible from $500 to $1,000 typically cuts your premium by 10 to 25 percent, but only if you can afford to pay that amount out of pocket after a crash.
  • Bundling your car and home insurance with the same company usually saves 15 to 25 percent on your car policy, though you should still compare the bundled price against quotes from other insurers.
  • Low-mileage discounts, good driver discounts, and safety feature discounts exist at most insurers, but the size of each discount varies widely and some require you to ask.
  • Paying your premium in full upfront instead of monthly, or enrolling in automatic payments, can save 3 to 10 percent depending on your insurer.

Bundle your home and car insurance to unlock a larger discount

Most insurers offer a discount when you insure both your car and your home with them — typically 15 to 25 percent off your car policy. That sounds substantial, but the bundled price still needs to be competitive. A company might offer a 20 percent bundle discount but charge so much to begin with that you're still paying more than a competitor with no bundle discount at all.

The right approach is to get a bundled quote from your current insurer, then get separate quotes for car insurance from other companies. Compare the bundled total against the best standalone car quote. If the bundle is cheaper, stay. If it's not, switch and reconsider bundling later — or ask your current home insurer if they'll match the price to keep your business.

Ask about discounts you might not know you have

Insurance companies offer discounts for things like a clean driving record, completing a defensive driving course, having safety features on your car (like automatic emergency braking), and driving fewer miles than average. They also discount for paperless billing, automatic payments, and paying your full premium upfront instead of monthly.

The problem is that insurers don't always volunteer these discounts — you often have to ask. When you get a quote, ask the agent or the website what discounts you might be may have access to to. Some companies list them clearly; others require a phone call. A defensive driving course discount might save you 5 to 10 percent, and it usually costs $20 to $50 to take the course online, so the math works out quickly.

Low-mileage discounts are worth asking about if you work from home, use public transit, or drive less than 10,000 miles a year. Some insurers offer this; others don't. The discount size varies from 5 to 30 percent depending on the company and how few miles you drive.

Understand what coverage you actually need

You're required by law to carry liability insurance in every state, but the minimum amount varies. Some states require as little as $15,000 in bodily injury coverage per person; others require $50,000 or more. Check your state's requirement, but understand that the minimum is often not enough. If you cause a serious accident and injure someone, medical bills and legal judgments can exceed your liability limit, and you'll be responsible for the difference.

Collision and comprehensive coverage are optional if your car is paid off, but required if you're financing or leasing. Collision covers damage from crashes; comprehensive covers theft, weather, and vandalism. If your car is old and worth very little, the cost of these coverages might exceed what you'd receive in a claim, so dropping them makes financial sense. If your car is newer or you couldn't afford to replace it, keep them.

Uninsured motorist coverage protects you if someone without insurance hits you. It's required in some states and optional in others, but it's usually inexpensive and worth keeping.

Pay attention to how you pay your premium

Paying your full annual premium upfront instead of in monthly installments typically saves 3 to 10 percent. Enrolling in automatic payments from your bank account also usually qualifies for a discount. Some insurers combine these — you might save 10 percent for paying annually and another 2 to 3 percent for autopay, for a total of 12 to 13 percent off.

If you can't afford to pay the full year upfront, automatic monthly payments are still better than paying by check or credit card, because most insurers charge a fee for those methods.

Review your coverage after major life changes

Your insurance needs change when you move, get married, have children, pay off your car, or retire. Moving to a different state or even a different city can change your rate significantly because insurance companies price based on local accident and theft rates. Getting married sometimes qualifies you for a discount. Paying off your car means you can drop collision and comprehensive if you choose to.

After any of these changes, get new quotes. What was the best deal last year might not be this year, and your circumstances might make you may be able to access for discounts you didn't have before.

Frequently Asked Questions

Does checking my insurance rate lower my credit score?

No. Getting a quote from an insurance company results in a soft inquiry on your credit report, which doesn't affect your score. A hard inquiry — the kind that lenders do when you apply for a loan or credit card — does affect your score, but insurance quotes don't trigger that.

Will my rate go down if I install a dash cam or anti-theft device?

Some insurers offer discounts for anti-theft devices like steering wheel locks or GPS trackers, but dash cams typically don't may have access to. Ask your insurer what devices they recognize before you buy anything. The discount is usually small — $5 to $15 a year — so factor in the cost of the device itself.

Can I get a discount for being a good driver if I have an accident on my record?

Most insurers offer a good driver discount only if you have no accidents or violations in the past three to five years. Once an accident ages off your record, you become may be able to access again. Some companies offer accident forgiveness programs that prevent your rate from going up after your first accident, but these usually cost extra or require a higher premium to begin with.

What happens to my rate if I switch insurance companies?

Your new insurer doesn't know about your history with your old company. They only see your driving record, claims history, and the information you provide. Switching companies is one of the best ways to get a lower rate, especially if you've been with the same insurer for several years and haven't shopped around.

Is it cheaper to insure an older car?

Yes, usually. Older cars cost less to insure because they're worth less, so collision and comprehensive coverage cost less. However, if your older car is still being financed, you're required to keep full coverage, which limits your savings. Once it's paid off, you can drop collision and comprehensive and see a significant drop in your premium.