How I Save Money on Car Insurance

When you think of ways to save money on car insurance, do you ever stop to think about the ways you could be costing yourself more? For example, being a bad driver can cost you more.

Also, if you have a lot of accident claims (whether they’re your fault or not) can raise your car insurance premiums. Similarly, if you have young drivers on your account, they increase car insurance costs.

However, those young people need to learn to drive and you have to insure them. That being said, that doesn’t automatically make them bad drivers.

In fact, being a good driver could help you save money on car insurance. How?

I’m not just talking about a driver who doesn’t get speeding tickets or have car accidents. I’m talking about driving habits.

For example, when you’re driving, don’t brake hard or make sudden accelerations. These are the kinds of habits that are good for fuel economy and your car’s overall health.

They could also be good for your bank account. You could be rewarded with potentially lower auto insurance premiums.

OnStar Smart Driver Program

I got to test this concept firsthand a few years ago. The folks at Buick loaned me a Buick Encore, an upscale small SUV. The car came with OnStar.

What made OnStar in this Buick Encore different was the fact that it had the OnStar Smart Driver program built into it. OnStar Smart Driver is free to use.

That meant that during the long weekend when I was test driving the car, OnStar Smart Driver was test driving me, if you will, by grading me based on my driving habits.

By the way, the car was a real pleasure to drive. It had an easy-to-navigate dashboard that I could use for directions, to make a call or listen to the Hamilton soundtrack on my iPhone.

I also downloaded the My Buick app to my phone. This allowed me to track the car’s diagnostics, like tire pressure, as well as use it to locate my car in the mall parking lot. Also, if needed, it could send directions for a future trip as well as request roadside assistance.

Possible Insurance Discounts

After my time driving the Buick, I got a driving report card. Like a report card in school, anything above a 65 is considered to be a passing grade.

But scores closer to perfect, like my one day of getting a 100 for my driving, are the best. According to Steve Samolinski, OnStar Vehicle Management Services Manager, those with good scores could save up to 30 percent on their car insurance.

“Customers may also choose to enroll in the Insurance Discounts Eligibility portion of OnStar Smart Driver, which is a risk-free way to see if their driving behavior qualifies them for discounts, without revealing any personal details to insurance companies,” he says. “Participating insurance companies currently include Progressive, Liberty Mutual and Nationwide.”

Basically what happens, Samolinski explains, is OnStar shares driving behavior with insurance carriers on the customer’s behalf. Then if the insurance company is interested in making an offer to the driver, OnStar presents that information back to the customer.

“If the customer decides to pursue this,” he adds, “it’s up to them.”

Other Driving Behavior Discounts to Save Money

While it’s cool that a company like OnStar can help you find less expensive auto insurance based on your driving habits, if you don’t have a GM car, you’re not out of luck. You can still find ways to save money on car insurance based on driving habits.

Progressive’s Snapshot also tracks driving behavior to offer discounts. GEICO offers a similar program.

This is all done through something called telematics, which is something the National Association of Insurance Commissioners expects most auto insurance companies have at this point. Some might even call it smart drive insurance.

Beyond these driver diagnostic discounts, here are other ways you might be able to save on car insurance.

Save Money on Car Insurance By Combining Insurance

Perhaps one of the best ways to get the biggest discounts on auto insurance is to combine your accounts. That way one company provides auto, home and any other insurance you might have.

For example, with Erie Insurance, if you insure your auto along with a home or life insurance policy, you may receive a multi-policy discount that averages about 10 percent on an auto policy.

Liberty Mutual, GEICO and the other major players that offer more than just car insurance are likely to give a discount for bundled insurance policies as well.

For example, when we rented an apartment between selling our house and moving to New Jersey, we found affordable, excellent renter’s insurance through Liberty Mutual.

Save money on insurance based on mileage

Jane Coloccia runs her public relations company from the Oregon Coast. She doesn’t drive a lot.

So, it was important to insure her car with a company that, as she says, “works well when your driving habit is not to drive that much.”

She found that company in MetroMile, which offers pay-per-mile insurance. Currently, MetroMile is available to drivers in the following states:

• California
• Oregon
• Washington state
• Illinois
• Pennsylvania
• New Jersey
• Virginia

MetroMile tracks Coloccia’s driving with a telematics device she’s inserted in her car’s diagnostic port. “So if I don’t drive for a week, my rates are incredibly low,” she says. “And if I drive a lot, there is a cap per day I would pay, which is quite reasonable.”

Look for good student discounts

If you have students in your family that drive, be sure to share their good grades with your insurance company to save money. State Farm, Nationwide and AllState have some sort of good student discount program.

In fact, when my daughters were in undergraduate, we made it a habit to send their transcript to our State Farm agent. That way, we got a discount on their car insurance, thanks to their good grades.

Here are ways college students can save money on campus.

Don’t over-insure a car at home

Another important note for saving money on car insurance when you have college students on your auto insurance program. When the kids go back to school and don’t take a car with them, let your insurance company know.

Because your child will be away for months at a time and not behind the wheel, you can usually get a temporary discount. This usually applies if your child attends a school more than 100 miles from where you live.

If your child lives closer but will be spending a year abroad, definitely update this with your insurance company as well. There’s no reason to pay a full premium to insure a driver who is living on another continent.

Tips for saving money on gas.