Insurance

8 money hacks to pay less for insurance in 2022 + how much they’ll actually save you

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Sometimes it seems like 90% of what’s on the Internet is “life hacks,” many of which are dubious at best. The question is often not if you can fashion a new shower head out of a plastic Coke bottle, but if you actually should. (And the answer to that is, in almost all cases, no).

The same is true of many money hacks. Some can save you big with a small investment of time, and others, like driving all over town to pay a few cents less on gas, might not ultimately be worth it. 

One expense that most people have is insurance. Whether you rent or own your home or drive a car, you likely have some form of protection for it. And in the case of auto insurance you are even legally required to. 

And rates are going up. According to research from The Zebra, the average American paid $1,529 for car insurance in 2021 (up about 3% over 2020). 

Did you end up seeing a rise in insurance premiums this year? If so, and if you’d like to see that number come back down, here are a few insurance hacks…plus how much they’ll likely actually save you based on our research.

1. Buy a used car

In terms of how much you’re likely to save on your insurance, this “hack” ranks first. Drivers can save an average of 27% by buying a 5-year-old model over a brand new one. Is trading in your new car for an older model something you’re likely to do tomorrow just to save on insurance? Probably not. But if you’re in the market for a new-to-you car anyway, pay attention to what you buy and how it can affect your insurance rate. Not only the age, but factors like the make and model of your car also impact what you’ll pay.

Drivers can save an average of 27% by buying a 5-year-old model over a brand new one.

2. Improve your credit score

Improve your credit and, while you’re at it, make more money than you do now. Obviously, this one also falls into the “easier said than done” category. But you can add insurance premiums to the pile of things that become cheaper for you with a higher credit score. While some states don’t allow credit to be a factor in determining insurance states, in many, it can make a big difference in your rates. By improving your credit score by just one tier, you can save up to 17% on average.

3. Purchase your policy in advance

You can usually save a little on your insurance if you pay in advance, and the more advanced of a purchase, the cheaper annual auto premiums will be. By making your payment in full rather than in installments you can save around $73 a year. You can also see incremental savings from things like an electronic signature which has an average yearly savings of $16 (or about 1%). And finally, by using electronic fund transfers, you can save another 1.5% a year.

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4. Bundle your insurance

Do you own or rent a home? If so, and if you have a policy to protect it too, you might be able to hack your way to a bit more savings. But how much can it actually save you? By bundling an auto policy with your home, condo or renter’s insurance in 2021 you could have saved 8% on average. The greatest savings — around 10% — was with home insurance, but renters also saw savings of about 5%.

5. Maintain continuous coverage for at least 6 months

The longer you’ve been insured, the lower your rates. Rates will go down after 6 months, 1 year, 3 years and 5 years of maintaining continuous coverage. Make sure you have no gaps of any length between periods of coverage. By maintaining coverage continuously for 6 months, your insurance rate can go down by around 5% or a savings of about $115 a year, so it makes sense to shop around at this time.

Rates will go down after 6 months, 1 year, 3 years and 5 years of maintaining continuous coverage.

6. Use a telematics device

If you’re generally a safe driver and you don’t drive frequently or at night, you might find it can save you money to track your actual usage and have a rate based on that. User-based insurance or telematics insurance policies use devices in your vehicle to measure how, when and how much you drive and determine a rate based on that data. This can be a good option if you have some other factors that might cause your rate to go up (such as having a teen driver on your policy). Use of a telematics device can save an average of 4% on your insurance.

 

7. Explore all possible discounts

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Are you a veteran or current member of the military? What about a teacher? Are you (or do you have on your policy) a good student? There are insurance companies that offer discounts for all of these. Check with your insurance company or shop around to make sure you’re taking advantage of all possible discounts.

8. Compare insurance providers frequently

As you’ve seen with some of the suggestions above, there are a lot of things that can affect your insurance rates and many of them are changing. As your credit score improves or you get older or your vehicles change, so too will your rates. However, your insurance company will not be contacting you out of the blue to suggest that you pay less. It’s on you to continuously seek out comparisons and make sure you’re not leaving money on the table. 

At The Zebra, we make it easy to compare rates from 100+ insurance companies and find the policy that’s right for you.

Compare insurance rates quickly and easily.

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Susan MeyerSenior Editorial Manager

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebra a year. She currently specializes in producing research-focused content for The Zebra's Resource Center on topics related to auto and home insurance, personal finance and smarter living in the 21st century.

Susan's work has been cited by the Insurance Information Institute, State Farm, BuzzfeedCBS, Yahoo, Entrepreneur and Business Insider.