How I Saved $2,680 a Year on My Car Insurance

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While your insurer might be raising rates this year, others could be holding steady or even lowering them. That’s because each insurance company uses its own formula when determining premiums, says Diana Moinot, founder of Moinot Insurance Group in Houston. What could be a strike against you with one insurer might not weigh as heavily in another’s calculations. “That can lead to hundreds of dollars in savings a year,” she says.

My husband and I have used an independent insurance broker for more than a decade to do comparison shopping for us. Brokers work for their clients, not for any particular insurer. They obtain and review quotes and policies from multiple companies. Most don’t charge customers a fee because they get paid a commission from the policies they sell, says Erika Tortorici, owner of Optimum Insurance Solutions, an independent brokerage in the Boston area.

If you prefer a do-it-yourself approach, you can get quotes from multiple insurance companies at once by comparing rates using marketplace sites such as Insure.com, NerdWallet or Policygenius. The process takes less than 10 minutes, Longero says. Make sure you have the Vehicle Identification Number (VIN) and driver’s licenses for all the drivers in your household you want to insure before you begin.

Compare apples to apples

But price isn’t the only thing to look at when soliciting insurance quotes. Check that the coverage matches what you currently have, “so you’re not giving up essential protection to save a few dollars,” Moinot says. Our independent broker did this for us when comparing quotes from other insurers.

If you’re getting quotes on your own, use your insurance plan’s declarations page (“dec page”) to do a side-by-side assessment of your current policy with the new ones you’re considering. Be sure to check the following:

• Coverages. Do you only have basic liability coverage, or do you also have personal injury protection, uninsured and underinsured motorist coverage, collision insurance and comprehensive coverage?
• Coverage limits. The limit for collision and comprehensive coverage is typically the cash value of your car. Liability coverage limits are expressed as three numbers, such as 100/300/100. In that example, the insurer will pay up to $100,000 for bodily injury per person, $300,000 for bodily injury per accident and $100,000 for property damage per accident. That’s the minimum coverage Moinot recommends, but she suggests upping those caps as you age. “I usually recommend the 250/500/100 liability limits for most [insured drivers] over 45 years old to protect their assets,” she says.
• Deductibles. This is the amount you pay out of pocket before collision, comprehensive, personal injury protection or uninsured/underinsured motorist coverage kicks in. Most drivers opt for $500 deductibles, according to Kelley Blue Book, but choosing higher amounts can reduce your premium. Moinot recommends obtaining a verified quote, which is more accurate because it uses your motor vehicle report and claims history to calculate your premium. Otherwise, the quote you receive could be lower than the rate on your final bill. 

If you use an online comparison tool that doesn’t require you to enter any personal details, you’re getting an estimate — not a verified quote.

Maximize discounts

When comparing auto insurance quotes, make sure all the discounts you qualify for are being factored into the rates you’re offered. Your current policy’s declarations page will show what discounts you’re receiving.  

Discount options and amounts can vary from insurer to insurer, so there are opportunities to save money by switching. For example, if you have young drivers on your policy, as my husband and I do, one company might give a bigger discount than another if your children have good grades or are away at college without a vehicle.

When working with a broker, Tortorici suggests asking them, “What can I do to max out every discount?”

Many insurers offer lower rates for customers who do the following:

• Bundle insurance policies. Combining your auto insurance with your homeowners insurance can cut your premium, typically by 5 to 25 percent.
• Maintain a clean driving record. You can often save up to 10 percent for being a safe driver and accident-free.
• Pay your annual premium upfront. Opting to pay your bill in full rather than in monthly installments can typically save you 5 to 10 percent.
• Take a defensive driving course. Completing a class can reduce your rate by 10 to 15 percent on average.
• Drive less. Many insurers offer low-mileage discounts of up to 20 percent if you drive less than 7,500 miles a year.
• Insure a vehicle with safety features. Owning a car with an alarm system, anti-lock brakes or airbags can cut your premium by up to 30 percent. 
• Let your insurer track your driving. Allowing your insurance company to install a device to monitor your driving typically results in a 10 to 15 percent discount, as long as you drive safely.
• Share your kids’ good grades. You can often reduce the cost of insuring young drivers in your family by 5 to 25 percent with proof of a B average or better if they’re full-time students.

Check insurer ratings

Auto insurers are rated for factors such as financial strength and customer service by credit, financial and consumer information companies like AM Best, S&P Global Ratings and J.D. Power, and the National Association of Insurance Commissioners maintains a complaint database. Websites such as Insure.com, Insurance.com and NerdWallet use these sources, along with rate analysis, to compile their own rankings of auto insurance companies.

Using an insurer that scores highly in these ratings is a strong indicator that you’ll get good rates and service and “a company that’s going to be able to pay your claims,” Longero says.

Don’t shy away from a highly rated company if you haven’t heard of it, especially if it’s offering you a good rate. You’re likely to be familiar with major insurers from their TV commercials, Tortorici says, but a lesser-known company might simply be spending less on marketing.

Switching without a hitch

My husband and I changed our auto and home insurance policies to the new company because it offered a better deal on both — even before a multi-policy discount was applied. Switching insurers lowered our 2025 auto insurance premium to $3,694, a savings of $2,680, and our home insurance policy is $175 cheaper for the same amount of coverage.

It took our broker three weeks to do the comparison shopping, provide us with quotes, answer the numerous questions we posed in a series of phone calls and emails, and send the new policies for us to sign.

One more thing: If you find a lower rate and want to switch, don’t terminate your current policy before your new one is active, Longero says. Driving without insurance is incredibly risky, especially because auto liability insurance is mandatory in almost every state.