By Sonya Sellmeyer, Consumer Advocacy Officer for the Iowa Insurance Division
Auto insurance is a necessary expense for drivers, but it doesn't have to break the bank. According to the Insurance Information Institute, Iowa had the third least expensive auto insurance in 2021 with an average expenditure of $725.30. Still, the U.S. Department of Labor states auto insurance rates rose 19.5% over the last year. Consumers can effectively save money on their auto insurance premiums. Here’s how:
Compare quotes from different insurance companies regularly. Prices can vary significantly between insurers for the same coverage. Many insurers offer discounts if you bundle multiple policies, such as auto and home insurance. Inquire about discounts for being a safe driver or good student, or affiliations with certain organizations or employers.
Increasing your deductible typically means lower premiums. Just make sure you can afford the deductible in case of a claim by having an emergency fund to cover any deductible expenses you may incur.
Safe driving habits can lead to lower premiums over time. Avoid accidents and traffic violations. Some companies may offer lower rates when you install an app on your phone to monitor your driving habits.
Consider the type of car you drive. Vehicles with high safety ratings and lower repair costs generally have lower insurance rates. Before purchasing a car, research insurance costs associated with different makes and models to make an informed decision.
Review your coverage needs. For instance, if your car's value has decreased, you might not need comprehensive coverage anymore.
Some insurers offer lower premiums for drivers who drive fewer miles. Pay-as-you-drive programs, which base premiums on the number of miles driven, can also be cost-effective for low-mileage drivers.
Your credit and insurance score may also factor into your premium. A credit score predicts the likelihood of paying back a loan, and an insurance score determines the probability of an insurance loss. An insurance score is calculated using the information on your credit report and not your annual income, ethnic group, age, gender, and other similar factors. A high insurance score translates to less probability of filing an insurance claim, thus leading to lower premiums. Ask your insurance carrier about access to your insurance score.
Insurers offer discounts for cars with safety features like anti-lock brakes, airbags, and anti-theft devices. Make sure the proper vehicle identification number for your vehicle is submitted to your agent so you receive discounts for these features.
Paying your premium in one lump sum annually rather than monthly may lead to savings.
Maintaining continuous auto insurance coverage which demonstrates reliability to insurers and may lead to lower premiums over time.
If you are unable to obtain coverage in the voluntary market, the Iowa Auto Insurance Plan may provide you access to automobile insurance coverage. Speak to a licensed insurance agent if you need to inquire.
The Iowa Insurance Division licenses many auto insurance carriers. To find the appropriate policy for your situation, speak to a licensed insurance agent regarding insurance options. Exploring your options may provide the most affordable coverage.
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