How to Save Money on Car Insurance


We all have a love-hate relationship with insurance. We hate to pay the premiums but we’re relieved when we need it and it’s there. If you own a car, car insurance is a “must-have”—not only for your peace-of-mind, but the law says you must carry at least liability insurance. In Nebraska the minimum liability requirements are $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident, $25,000 property damage liability per accident, $25,000 uninsured motorist coverage per person, $50,000 uninsured motorist coverage per accident. The Iowa requirements are $20,000 bodily injury liability per person, $40,000 bodily injury liability per accident, $15,000 property damage liability per accident.

Even though it is a “must have” you shouldn’t spend a penny more than necessary on car insurance. Knowing what factors affect the rate you pay is the best way to get good car insurance coverage without over-stressing your wallet.

Factor #1: The car you drive. The time to start saving on insurance is when you are shopping for a new or used vehicle. If you have your eye on a specific make and model, check the insurance rates before you buy and you can avoid insurance sticker shock. points out that “[s]afe and moderately priced vehicles such as minivans and small SUVs tend to be cheaper to insure than flashy and expensive cars.”

Factor #2: Your credit rating. It may not seem fair, but your credit rating is a factor insurance companies apply in calculating your premiums. In some cases it may be even bigger factor than your driving record.  So for better car insurance rates, improve your credit by making all credit card and loan payments on time, don’t max out your credit card limits, and don’t apply for any more credit accounts than absolutely necessary.

Factor #3: Drop insurance coverage you don’t need. If you are driving a car that is only worth a few thousand dollars or less, if you vehicle has greatly depreciated in value, or if you only drive in frequently and rack up less than a few thousand miles a year, you should run the numbers on whether or not it is worthwhile to carry expensive comprehensive or collision coverage. But bear in mind, that if you have car loan, your lender may require the additional coverage. If it makes financial sense to keep the extra coverage, consider raising your deductible. Most car owners have $500 deductibles, but by increasing this to $1,000 you can save quite a bit every year

Factor #4: Insurance company discounts. There are dozens of insurance discounts available including discounts for bundling with other insurance; for being a home owner, a good student, or an active duty service member; for the safety equipment on your car (like anti-lock brakes); for automatic withdrawal of premiums; and many, many more. Don’t expect, however, that your insurance company is just going to hand over the discounts without being prompted. Ask your insurance agent or your insurance company call center to provide you with a list of all the discounts they offer.  It is also worth the effort to shop and compare discounts every year.

Factor #5: Take a defensive driving course.  Another simple way to save money on your car insurance coverage is to take a defensive driving class. Many insurance companies will offer you a discount—usually $100 or more per year--if you provide proof that you have completed a defensive driving course. Some courses you can even complete online, but check with your insurance agent to be sure the defensive driving course you are considering will satisfy their requirements. (Of course, the real benefit here is that a defensive driving course could save your life!)

The bottom line? There are millions of Americans overpaying for auto insurance, but you don’t have to be one of them.





Timothy J. Cuddigan (Founder - Retired)
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Omaha Social Security and Veterans Disability Lawyer With Over 40 Years Experience
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