5 ways to save money on car insurance without cutting coverage

Fact-checked with HomeInsurance.com

The COVID-19 pandemic has devastated the national economy, leaving millions out of work and wondering how to make ends meet. Clearcover found that 34% of people are considering changes to their car insurance to help save money during this uncertain time.

It may be tempting to make deep cuts to lower your premium right now, but getting rid of essential coverages when you still have the same risks could set you up for more financial hardship down the road. 

“Be thoughtful of your specific and personal situation, and then make decisions that will help you save money,” says Ariana Gibson, Head of Driver Insights at Clearcover. “Make sure you truly understand what it is you’re changing.”

So, what can you change in order to help cut costs without cutting coverage?

1. Increase your deductible

Your deductible is the amount that you agree to pay out of pocket if you need to make a claim, so committing to share a higher amount of risk with your insurer can make a big difference in the price of your policy.

However, it’s important to be mindful of what risk you can actually absorb in the worst-case scenario. Gibson recommends choosing your deductible by considering: “what would you be able to afford if you had to?” 

Bankrate found that 60% of Americans can’t cover an unexpected $1,000 expense, so make sure not to commit to a deductible unless it’s one you’re confident you can pay. You’ll have to meet your deductible in order for your insurance coverage to kick in, and that coverage is exactly what you’ve been paying for.

2. Usage-based or pay-per-mile insurance

Pay-per-mile or usage-based policies and programs offer a unique opportunity to save without altering your coverage levels. 

Many traditional insurers are now offering optional programs that use driving data to give discounts tailored to your driving habits. Allstate’s Drivewise app measures usage-based factors like speed, time of day and braking to award cash back of up to 25% every six months for safe driving.

There are also digital insurers that are dedicated to creating these types of policies. Metromile, a leading pay-per-mile insurer told us its customers have saved 30% this March as compared to last and are expected to save 40% in April as shelter-in-place orders are in effect for the full month.

3. Gather quotes from other insurance providers

Regardless of the type of insurer you’re looking for, shopping around for a better price is a great way to find out if you could be saving without compromising coverage. We recommend gathering online quotes in order to quickly compare multiple insurers.

4. Evaluate your add-on coverages

While it’s important to keep adequate coverage levels on key protections like personal property and bodily injury liability, there may be add-on coverages that you can cut if you no longer need them.

Roadside assistance – If you’re barely driving, or only going short distances as a result of the shelter-in-place measures, continuing to pay for the ability to call on towing services 24/7 may not make sense.

Rental car reimbursement – Another endorsement to your policy that you may not need if you’re barely driving or driving very small distances would be one that applies to rental car usage. You may want to consider dropping this type of coverage if you are unlikely to need a rental car even if your vehicle is unusable right now.

5. Talk directly with an insurance agent

Gibson highlighted the importance of speaking with an insurance expert who can help you navigate the compromises worth making. “The person on the other end of the line should say: ‘Tell me about how your situation has changed,’” in order to guide you when weighing your options.

If you feel like your agent is dismissing your concerns or pressuring you not to make any changes that would lower your bill, try talking to other insurance company representatives to see if they may have other ideas to help you save or be able to explain why you should consider the coverage you have to be non-negotiable. 

Samantha Kostaras

Insurance Reporter

Samantha Kostaras is an insurance reporter who covers financial services and insurance. Before becoming a writer, she worked as a financial analyst and earned her Bachelor’s degree in Finance from the University of Alabama.

Consequences of driving without… Read Next What Home Insurance Doesn’t…