Car insurance can be costly, but it’s not something that can be ignored. You can’t avoid having it, and therefore it is crucial to make sure you’re not overpaying for it. As a result, if you are a senior looking to save money on car insurance, then your savings options are definitely worth a closer look!
How Much Does Car Insurance Cost?
Average car insurance premiums vary from state to state .
The minimum average coverage premium ranges from $227 in Maine to $995 in Michigan. For full coverage, average premiums range from $782 in Maine to $2,711 in Louisiana. Among the most expensive states in terms of car insurance are Louisiana, Florida, Michigan, New York, Kentucky, Nevada, and California.
But although your location will somewhat affect the cost of insurance, there may be some other factors at play.
Investopedia points out 3 insurance cost factors – you, your age, and type of coverage. Let’s have a brief overview of these factors to hopefully help you adjust your strategy to land a better deal.
Investopedia lists four different components connected with you – the car owner – that impact the cost of insurance:
- Driving record. For high-risk drivers with a significant number of violations or DUI cases, insurance costs will be higher.
- Age. Younger drivers are inexperienced and are more likely to get into accidents, which increases premiums.
- Gender. Men pay higher premiums because they have a higher risk. This is because the number of women-drivers is statistically lower.
- Credit score. Better credit scores translate to lower premiums.
When it comes to the car, its make and your location are key factors of insurance costs.
Insurance for luxury cars will cost more. Part of the reason for this is that replacement parts for makes like Lamborghini or Ferrari are scarce and expensive. In contrast, parts for a Ford are going to be more accessible and thus cheaper.
As for location, in areas with heavy traffic where collisions are likely, the insurance premiums are higher. Besides, areas prone to natural disasters also drive insurance costs up.
Type of insurance
Needless to say, more comprehensive coverage is going to cost you more, but it will give you better financial protection in the long run as well. Needless to say, you need to investigate your options to figure out how much coverage you should get.
Ways Seniors Can Save Money On Car Insurance
If you are a senior, then there are many options for saving money available to you .
Look for senior discounts
Most car insurance providers in the United States and worldwide offer discounted premiums for seniors. Since older car owners are considered more reliable and experienced, seniors are very likely to get better premiums.
Some states require that you take a driving class to refresh your skills before getting a discount. But these classes are simple and cheap (usually $20), and their long-term benefits are often worth it.
Consider per-mile programs
If you aren’t driving a whole lot, then per-mile insurance programs are perhaps the right choice for you. Premiums in these programs depend on the distance you cover during each month. These plans are great if your car use varies throughout the year.
Don’t waste money on excessive coverage
Different insurance plans offer different coverage. Obviously, more coverage is equal to higher premiums. To save money, you should only get what you need – either drop coverage that is no longer necessary or (if you currently have no car insurance) choose a plan that only has the essentials.
Adjust your deductible
You may optimize your insurance costs by adjusting your deductible. Higher deductibles lead to lower premiums, and lower deductibles accordingly come with higher premiums . It’s difficult to tell which deductible-premium strategy you should choose – you need to do more research to figure that out.
Bundle insurance policies
Many companies offer discounts for those who bundle several insurance policies. If you do need the coverage, then this is a great way to save money. But needless to say, only bundle policies if you absolutely need them.
Protect your car
Equip your vehicle with alarms and car tracking devices – these may make insurance providers more confident in your reliability. You are more likely to get a discount if you make your car more secure and more theft-resistant.
Be sure to look around to find a policy that offers the best coverage for the money. However, don’t forget to read the fine print – low-cost insurance policies may have a bunch of unpleasant surprises hidden in the contract.
Take The Step To Optimize Your Insurance Spending
Saving money on car insurance is quite easy for seniors – however, choosing the right insurance plan is instrumental to optimizing your budget. With that, make sure to research your options and understand what you can do to cut your insurance spending.
- “Average Cost of Car Insurance 2020”, Bankrate, https://www.bankrate.com/insurance/car/average-cost-of-car-insurance/.
- “How Much Does Car Insurance Cost?”, Investopedia, https://www.investopedia.com/how-much-does-car-insurance-cost-5072100.
- “Getting Cheap Auto Insurance for Seniors”, NerdWallet, https://www.nerdwallet.com/blog/insurance/seniors-guarantee-best-auto-insurance-rates/.
- “How does my deductible impact my premium?”, BCBSM, https://www.bcbsm.com/index/health-insurance-help/faqs/topics/how-health-insurance-works/understand-deductibles.html.