Before age 30, men tend to pay more than women do for car insurance — sometimes a lot more. But after that, the tables may turn. One NerdWallet analysis shows that women can pay up to 5.4% more than men for the same coverage once they reach the big 3-0.
Single women typically pay more than married women. A July 2015 study from the Consumer Federation of America indicates that five of six major insurance companies consistently charge separated, divorced or never-married women more than their married counterparts.
Only three states — Hawaii, Massachusetts and North Carolina —don’t allow insurers to consider gender when pricing auto insurance.
Of course, you won’t get married or stay married just to save money on car insurance. But you should be aware of other strategies you can use to lower your premiums.
1. Shop around
It’s difficult to overstate the importance of comparing multiple insurance quotes if you’re looking for a good price. A recent NerdWallet study found that drivers can save an average of $859 a year simply by shopping around. And you don’t even need to leave your couch to do that. Just make sure that the quotes you’re comparing reflect the same level of coverage.
[Compare car insurance quotes with NerdWallet’s Car Insurance Comparison Tool.]
It’s smart to compare rates periodically even if you’re happy with your current insurer. The company that offers you the best deal may not be the same year to year. This is especially true if you’ve moved to a new state. For example, a NerdWallet analysis of rates charged by the 10 biggest insurers in three states found that Geico had the lowest rates in New York but the most expensive in California.
2. Ask for discounts
Most major insurance companies offer a wide variety of discounts, so ask your agent what’s available. You might be able to lower your rate by being retired or a recent graduate, not driving very much, taking a defensive driving course, buying multiple policies or types of policies from the same insurer, having a car with certain safety features — such as automatic seat belts or anti-lock brakes — or paying your premiums with automatic withdrawal.
If you’re looking for a “safe driver” discount, find out how long it takes to qualify. For example, Allstate requires only three years of driving without a violation or accident before it’ll grant the price break, while Geico requires five.
3. Buy a cheap-to-insure car
Your choice of vehicle will affect your rates, especially if you’re purchasing collision and comprehensive coverage. Your insurer determines your premium in part based on its past experiences with your car model, including claim history, repair costs and theft rates.
Minivans and small- to medium-size SUVs are among the cheapest vehicles to insure.
4. Reduce coverage costs
If you have a late-model car, you probably want comprehensive and collision insurance. They will be required if you’re financing the vehicle. But you can lower your premiums for both by choosing a higher deductible. NerdWallet found that raising your deductible from $500 to $1,000 saves an average of $200 per year, and raising it from $500 to $2,000 saves an average of $362 per year. (Our study analyzed only one vehicle, a 2015 Camry, in two states, so your savings will vary.) Just make sure you have enough set aside in an emergency fund to meet your deductible, if necessary.
Don’t try to save money by skimping on liability coverage. Each state dictates a minimum amount that drivers must have, but those amounts are often insufficient to protect you financially after an accident. Boosting your coverage from $50,000 per accident to $300,000 — which offers significantly more protection for your assets — costs an average of $247 per year, according to a NerdWallet analysis.
5. Drive smarter
The better your driving record, the better your insurance rate. Some tips:
- Take a defensive driving course. You’ll learn strategies for avoiding accidents and may even get an insurance discount.
- Adjust your driving habits when roads are snowy, icy or rain-slicked.
- Use cruise control on the highway when traffic is light to help keep your speed at or under the limit.
- Avoid using your cellphone while behind the wheel. Texting and driving is illegal in 46 states and Washington, D.C., and hand-held cellphone use while driving is banned in 14 states and Washington, D.C.
6. Improve your credit
In all but three states — California, Hawaii and Massachusetts — your credit can help determine your car insurance rate. A NerdWallet analysis of rates in Florida, Ohio and South Carolina found that drivers with poor credit paid 76% to 123% more for car insurance than drivers with excellent credit. Drivers with average credit paid 28% to 37% more. If yours might be running up your rates, use these easy ways to improve your credit.
Offsetting gender pricing
You can offset gender-based rates with savvy car insurance decisions. Don’t buy too little coverage, but don’t pay more than you must, either. NerdWallet’s Car Insurance Comparison Tool can help you find a good deal.
Donna Freedman is a contributing writer at NerdWallet, a personal finance website.
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