Somehow opening an email for paperless billing doesn’t make seeing that car insurance bill any easier. Sure you’re saving paper and time, but it feels like you aren’t saving much money. That periodic auto insurance bill is yet another reminder of the rising costs of so many of our necessities. And every time you see it you have the same thought, ‘How can I lower my car insurance?’
There’s an easy answer, right? Just cut some coverage from your current policy or switch to a company that doesn’t have a great reputation, if they have any footprint at all. But cutting your coverage can expose yourself to legal and financial liabilities far worse than your current auto insurance premiums.
As personal injury attorneys, we know firsthand the pain and shock when people discover their insurance can’t or won’t help them in their hour of need. So the question becomes how to lower car insurance without compromising on coverage or customer service. Understanding how companies calculate car insurance premiums in the first place reveals some strategies for how to reduce insurance premiums.
How Insurance Companies Calculate Premiums
Car insurance companies calculate your insurance premium based on the risk they believe they undertake by issuing you a policy. The riskier you are to insure, the higher your premium – because the insurer believes they are more likely to pay out a claim, will need to pay out claims more frequently, or both.
Insurance companies prefer not to share the exact formulas and calculations they use to determine premiums, but they generally consider similar risks. Repairs, accidents, theft, and weather are some of the types of risks insurance companies factor into their premiums. How much of each risk you pose to the insurance company depends on some of the following:
Insurers Consider Your Car
The car you’re looking to insure is one of the main sources of information insurers use to calculate your premium. Consider certain KIA models that were easy to steal. These cars became harder to insure as a result. Insurers will consider:
- Make and Model: As the example above illustrates, the make and model of your car factor into a number of risks. Some models may be more vulnerable to theft or more desirable for thieves. Other models are more reliable and easier to repair if they do have issues.
- Year: As cars age, they depreciate in value. Insuring a vehicle with less value is less of a risk. But older cars may need repairs more often and parts can become harder to find.
- Mileage: Age and mileage can go hand-in-hand but not always. An older car with few miles on it might be in better shape than a newer car with hundreds of thousands of miles. Insurers consider both when determining the risk and the premium.
- Features: Additional safety and anti-theft features lower the overall risk of the car. But these same features can also increase replacement costs, creating additional risks for insurers to account for.
Your Coverage Determines Premiums
The amount of coverage you’re looking to purchase and the types of coverage you select help determine the premium. Insurance companies see higher policy limits as a greater risk because it means they’ll potentially have to pay more in the event of a claim.
Similarly, they view different types of coverage as exposing their bottom line to new risks. Comprehensive coverage, for example, exposes them to the risk of theft and storm damage, something other coverage types do not.
You Factor Into Insurance Cost Calculations
Finally, insurance companies also consider you demographically when calculating your final premium. Insurance companies now have a century’s worth of data on drivers and they’ve used that information to attempt to predict which drivers are riskier than others. Here are some factors they consider:
- Age: Young drivers in Georgia accounted for a disproportionate amount of accidents, according to the most recently available data. While they were 8% of drivers, young drivers were involved in 10% of crashes. Insurers take note of data like this when determining premiums.
- Sex: Insurers consider women less riskier drivers compared to men. They’ll look at all the named insureds on the policy and their sex and use that information to determine the proper premium.
- Credit History: It may seem strange, but insurance companies will consider your credit score when determining your premium. Their extensive data insights indicate that drivers with higher credit scores are less likely to file claims and therefore pose a lower risk to insure.
- Driving Record: Insurers are interested in your driving record perhaps above all else. This direct data provides insurers with a better idea of how you’ll drive in the future and what risks that may or may not create for them.
How to Lower Car Insurance Premiums
With a basic understanding of the insurance premium calculation, you already have a clearer picture of how to lower your car insurance. But it’s not the full snapshot, so here are 7 ways to get lower car insurance rates.
1. Find ‘Good Driver’ Discounts
You can receive discounts on your car insurance if you have a history of good driving because insurers factor your driving record into your premium. Typically, insurance companies will look for no moving violations and no accidents where you were at fault in the past 3 years or more.
2. Lower Car Insurance Premiums With A Driving Course
Another way to lower your auto insurance costs is through a defensive driving course. O.C.G.A. § 33-9-42 requires insurance companies to offer a discount of at least 10% on liability, first-party medical, and collision coverage if all named drivers on an insurance policy satisfy certain conditions.
These are a combination of a good driving record and completion of a Department of Drivers Services (DDS) approved defensive driving course. According to O.C.G.A. § 33-9-42, all drivers 25 years old and over:
- Must have no traffic offenses going back 3 years or since they received their license, whichever is shorter.
- All drivers must all not have had any claims for accidents where they were at fault in the past 3 years.
- The law also requires that all the drivers participate in at least 6 hours of defensive driver instruction from an approved course.
If there are drivers under 25 on the policy, they must:
- Have no traffic offenses going back 3 years or since they received their license, whichever is shorter.
- Have no claims for accidents where they were at fault in the past 3 years.
- Complete a preparatory course of new drivers with 30 hours of classroom instruction and at least 6 hours of practical training in DDS approved courses.
3. Add Safety and Anti-Theft Devices To Your Vehicle
Adding important safety features and anti-theft devices can help lower your insurance costs in the long run. Safety features can have an indirect impact on your overall costs because they help reduce the likelihood of accidents or collisions or reduce the overall damage should those events occur.
Anti-theft devices can more directly reduce your premiums when you have comprehensive coverage. If you only purchase liability or liability and collision coverage, insurers are not protecting you in the event of theft. However, if you do select comprehensive coverage, you can benefit from making it harder for thieves to steal your car or easier to trace it if they do steal it.
4. Buy Multiple Lines From One Insurer
Many insurance companies offer named discounts for drivers who purchase other policy lines from the same company. A common “bundle” is homeowners insurance and auto purchased from the same company. However, if you have discounts on the homeowners’ policy, they may only apply to that policy and vice versa.
5. Research Group Discounts
Your employer, alumni association, or professional organization might offer a special discount for members. Call or research the organizations you’re a member of to see if they offer special rates with auto insurance providers.
6. Get Discounts for Good Students
In addition to creating discounts for completing driver improvement courses, Georgia law also tries to reward good students. If you have a student under the age of 25 on your insurance policy, you may qualify for a good student discount.
According to GA Rules and Regulations 120-2-28-.08, insurance companies must offer a discount on liability, first-party medical, and collision coverage for each unmarried named driver under 25 if they:
- Are enrolled as a full-time student in high school, college or university, or vocational school.
- Are an honor student because their scholastic records for the immediately preceding quarter, semester, trimester or etc, show they rank in the top 20% of the class, have a B average or higher, a 3.0 GPA or higher, or are on the Dean’s List or Honor Roll.
The law requires you to demonstrate that the student in question remains an honor student as defined above each year to retain the discount. If the student has, within 3 years of the start of the policy, been at fault for an accident or been convicted of certain offenses, then the discount does not apply.
7. Raise Your Deductible
If none of those methods above applied and you’re still wondering how to get cheaper car insurance, there’s one final way. You can raise the deductible on your policy, essentially agreeing to take on more risk than you’d otherwise have. Insurance companies in turn, reduce the regular premium payments to compensate for your increased risk.
However, you should approach this method with caution. Your deductible amount is how much you’d have to pay in the event of a claim before the insurance company will contribute to the expenses. If you don’t feel you’ll be able to cover that amount, then don’t increase the deductible. While your policy coverage limits remain the same, there’s good reason to avoid taking on increased risk like this.
Why You Shouldn’t Get Lower Coverage
Raising your deductible or lowering your coverage may seem like the solution to get lower car insurance rates. It’s no secret that auto insurance in Georgia is expensive—from 2013-2022 it was the 7th highest in the nation. However, reducing your overall coverage isn’t the way to go about reducing those costs.
Lowering Coverage Puts You at Risk
Georgia isn’t just one of the top 10 highest states for auto insurance costs, it’s also ranked 7th for uninsured drivers at 18.1%. Perhaps because of the high costs for insurance, more drivers in Georgia than almost anywhere else go without it.
If you lower your collision or comprehensive coverage, it could leave you picking up the tab for an uninsured driver. This is all the more likely if you forgo that coverage altogether. In the event an uninsured driver is at-fault for an accident, you’ll either pay for the damage and medical bills your insurance doesn’t or have to sue the at-fault driver.
Georgia’s Minimum Insurance Might Not Be Enough
Georgia, like most states, has minimum liability insurance requirements that all drivers must comply with. These are currently set at $25,000 for bodily injury per person, $50,000 for bodily injury liability per accident, and $25,000 for property damage per accident. This is liability coverage, meaning your insurance pays in the event you’re at fault for an accident.
While $25,000 per person for bodily injury may seem like enough coverage, statistics don’t support that assumption. Nationwide, the evidence shows that the average claim amount for bodily injury liability was $26,501. That would leave you forced to pay the additional $1,501 that exceeds your insurance limits.
On a more local level, hospitalization costs in Georgia are over $28,000 on average. Remember too, that these are just the average costs and they could easily exceed these figures depending on the specifics of the accident.
Having only the minimum coverage could expose you to attempts from the injured party to sue you for the costs of their care. To secure payment, they may be able to garnish wages among other methods. The best protection against these outcomes is getting coverage at limits you feel comfortable with and that adequately protect your assets.
Don’t Get Rid of Uninsured/Undersinsured Coverage to Save Money
While your insurance company or agent may encourage you to waive uninsured/underinsured coverage to save money, doing so could be a very costly decision in the event you are injured by a driver that is uninsured or underinsured. Underinsured/uninsured coverage protects you from the situation where your medical bills and damages exceed the limits of the at-fault party’s insurance. If the party that injured you only has the Georgia state minimum of $25,000 and your damages exceed that number, your recovery is often limited by the amount of available insurance if you don’t have underinsured coverage on your policy. By choosing to have underinsured/uninsured coverage on your policy you may have access (depending on how your policy is written) to additional coverage to help fully compensate you for your injuries and damages. Even though this coverage costs additional money to maintain, it is well worth the extra cost.
Avoid Accidents to Lower Car Insurance Rates
You may not qualify for a good driver discount right now, but that doesn’t mean you can’t take steps to qualify in the near future. One way to do that is practice good driving habits that reduce the likelihood of accidents and collisions.
Drive At Reasonable Speeds
As personal injury attorneys with decades fighting for clients affected by auto accidents, we know the importance of reasonableness. We say drive at reasonable speeds because what’s reasonable depends on the circumstances.
Consider this: you’re driving on a freeway with a posted speed limit of 65mph. Is it reasonable to drive 65mph? It depends. On a clear, sunny day with no traffic, probably. But if there’s bumper to bumper traffic or heavy rain, it’s not as reasonable.
If you’re going too fast for the conditions, you give yourself less time to react to other drivers, pedestrians, or animals that may be on the road. The speed limit is only one indicator of what a reasonable speed might be, so consider the circumstances of the day and road as well.
Exercise Care But Don’t Expect It
This may sound harsh, but you can’t expect other drivers to care about you on the road. The best way to protect yourself and avoid accidents is to anticipate that the cars around you may make dangerous or abrupt decisions.
If the other cars may stop suddenly, make an abrupt lane change, turn without warning, or hit something, how can you exercise care? It starts by giving space to the car in front of you and cars around you. That space benefits you by giving you more time to recognize what the other car is doing and adjust accordingly.
On the other hand, you can’t expect that other drivers will show you the same courtesy. They probably won’t be able to guess your next move on the road, so using turn signals, horns, and lights help communicate your intentions and avoid accidents.
Take Adequate Precautions
You should also take precautions to protect yourself, your peace of mind, and others on the road. These precautions start before you begin driving. For example, a seatbelt is a precaution that can help prevent more extensive accident injuries.
But there are other precautions that can prevent accidents altogether. Start by avoiding all forms of distracted driving. O.C.G.A § 40-6-241, Georgia’s hands-free law, requires that drivers refrain from driving while using a phone or similar device in their hands, laps, etc.
Cell phone use while driving is only one form of distraction, though. Eating, getting ready for wherever you’re going, or reading billboards can all take your eyes off the road when it matters most. Combined, these sources of distraction have grave effects, causing over 3,000 deaths in 2023. To avoid distractions, and thus accidents, it’s always best to focus all your attention on the road ahead.
Further precautions to prevent accidents include refusing to drive tired or after any alcohol. While you may think the trip is short, or you haven’t had that much to drink, driving while tired or after drinking puts yourself and others at risk.
Did Another Driver Cut Coverage to Save Money? Call Montlick.
If you’ve been involved in an accident with an uninsured or underinsured motorist or don’t have enough insurance to cover your accident costs, call Montlick. When other drivers cause you injuries and damage on the roads, you have options, even when insurance isn’t one of them.
Our experienced auto accident attorneys listen to their clients, their stories, and their concerns. For over 40 years, we’ve been helping Georgia drivers recover after accidents by fighting for justice on their behalf.
Contact Montlick today to find where Real Legal Help Begins©. Your initial consultation is always free.
