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How To Lower Your Car Insurance Rates Right Now

By: David Bach  |  Last Updated: February 17, 2021
Financial Expert & 10x New York Times Bestseller
This content was originally published on Money.com
IN THIS ARTICLECompanies that lowered car insurance prices
How to negotiate cheaper car insurance rates

Chances are, you’re overpaying for car insurance right now — even with the auto insurance rebates many big insurers offered last spring in response to the Covid-19 pandemic. Why? You’ve probably been driving a lot less in quarantine, meaning you’re significantly less likely to get into an accident and need to file a car insurance claim.

Auto insurance prices should drop with the decline of driving, which happened on an epic, national scale last spring: There was a 71% reduction in the number of miles driven nationwide in the second week of April 2020, compared to the first week of March, according to the University of California-Davis Road Ecology Center.

While driving picked up slightly in May, and continued to increase as travel restrictions eased, the number of cars on American roads is still low compared to previous years. And that means auto insurance rates should be cheaper for the near future.

The takeaway for you as a car insurance customer is that you should at least try to catch a break on your premiums. And if your insurer isn’t offering a discount proactively, you should call and demand one or shop around for a cheaper rate with a different company — or both.  You can visit our affordable car insurance page if you are looking to save money immediately.

Companies that lowered car insurance prices

Many major insurers started offering premium relief and lowering rates for their customers last spring. Here are some companies that took action:

  • In April, Allstate initiated a “Shelter-in-Place Payback,” and gave customers 15% back on their auto insurance premiums for April, May and June. Other insurers, including Liberty Mutual, followed with their own discounts and paybacks on premiums. But most offers were limited to that two-month period and the savings amounted to about $50 per car.
  • Geico upped the ante by saying it would give a 15% credit on auto and motorcycle premiums for customers whose policies are renewed between April 8 and October 7. The savings apply to the entire policy period (six months), rather than just April and May, and Geico estimated that the benefits would cut rates by a total of $2.5 billion.
  • State Farm first announced in early April that it would give most auto insurance customers a 25% credit on policies for March through May, for an overall savings of close to $2 billion. More recently, State Farm said it was “working to reduce auto rates in every state,” including an 11% average discount nationally, worth another $2.2 billion in rate reductions.

How to negotiate cheaper car insurance rates

While it’s nice to work with an auto insurer that lowers your rates, it’s also wise to occasionally take matters into your own hands. Shopping around for cheaper car insurance once a year is always a good money-saving strategy. Hunting down a lower rate in 2021 should be especially easy. Like cable bills and monthly internet modem fees, car insurance rates have a tendency to incrementally rise over time, and it’s often up to you to notice and take action. Otherwise, you’re going to be stuck paying a higher price.

You can do this in one of two ways: One, call your insurer and ask for a lower price — and don’t be afraid to mention you’re considering switching to a competitor. Or, you can shop around with a competing service and jump ship with your current one if you find a better deal.

Here are some of the other tactics MONEY suggests to get a better deal of your car insurance:

  • Lower your mileage. Tell the insurance company your vehicle will be driven less than 5,000 miles, or even less than 3,000 miles, annually. That  could save 30% or more.
  • Remove your car’s “business” status. Insurers categorize vehicles for different kinds of usage — pleasure, commuter, business, etc. — and according to the insurance quote-comparison site The Zebra, you’ll pay $150 less per year, on average, for a car designated for pleasure, as opposed to business.
  • Get a higher deductible. Shifting your deductible from $250 to $1,000, or even $2,000, will result in significantly cheaper car insurance premiums. (Of course, this also means you’ll pay a lot more out of pocket if you get into an accident.)

Check out my top recommendations for car insurance companies

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