Last week, we established that auto insurance is not sexy, but essential. We delved into the main coverages, policy limits, deductibles, and looked at an example of how much a policy costs. In this week’s column, I’ll show you four ways to beat the auto insurance blues by making smart decisions that also save your money.

Lesson 1: Your Credit Score Has a Big Impact on Your Insurance Premiums

Insurance companies correlate a high credit score and making timely payments with a lower likelihood of you filing a claim. This feeds into your insurance score. The higher your insurance score, the lower your premiums. Your insurance score is closely tied to your credit score, according to research from the Federal Trade Commission (FTC).

Click to Learn More!

“Credit-based insurance scores are effective predictors of risk under automobile policies,” the FTC reports. “They are predictive of the number of claims consumers file and the total cost of those claims. The use of scores is therefore likely to make the price of insurance better match the risk of loss posed by the consumer.

“Thus, on average, higher-risk consumers will pay higher premiums and lower-risk consumers will pay lower premiums,” the FTC adds.

So how do you increase your credit score to lower your insurance premium? If possible, pay off your debts in full, borrow less on your credit cards, make timely payments, keep your accounts open to establish a solid payment history, and try to avoid many hard checks on your credit.

Hard checks on your credit occur when your financial application for credit is sent to the main three credit rating bureaus: TransUnion, Equifax (yes, that Equifax that got hacked), and Experian. This happens, for example, when you take out a new car loan or refinance existing student loan debt.

If you have a hard credit pull — say if you are refinancing your student loans — you can shop around for student loan refinance products for 30 days. The government groups together related pulls.

ScoreNavigator is a good, paid site that tells you when to pay off debt, how to correct your credit history with the three major bureaus, when to borrow money, and the impact of borrowing money on your credit score. Your credit history can have errors. By correcting them, you can quickly and easily boost your credit score.

I’ve used this service — and though I think it is useful for some, it wasn’t valuable for me, as I was already doing most of what ScoreNavigator suggested. It’s worth checking out, especially if you need guidance.

If that’s not your cup of java, you can use Annual Credit Report to pull your credit reports from each bureau for free, once a year. Many banks and credit card companies provide you a free credit score and credit modeling tools when you use their products.

Bottom line: Higher credit score equals lower auto insurance premiums, which will save you money on auto insurance. It’s within your power to fix.

Lesson 2: Bundle Your Auto Insurance With Other Coverage

What does bundling mean in the context of insurance? We know what it means with Internet coverage. It means you get wireless, cable, and internet together in one package, and the combined package costs less than if you bought wireless, cable, and internet separately.

Get Your Price in Seconds

The same is true for insurance. You can bundle your auto insurance with homeowner’s insurance, life insurance, umbrella insurance, motorcycle insurance, motorboat insurance, or rental insurance. Each combination earns you a discount.

It is common to bundle auto and homeowner’s insurance, saving you money on both.

Adding life insurance may give you further discounts. Each insurance company’s discounts differ. Plus, a consolidated bill with one company is convenient for the consumer.

Lesson 3: Compare Insurance Companies

Insurance shopping is akin to buying a car at a dealership. You must be willing to look, show interest, haggle, negotiate, threaten to walk out, call multiple dealers, bemoan the horrors of the process, cry, and accept with a sigh of relief when it’s all over.

There are online tools, like Net Quote, that can compare dozens of leading insurance companies simultaneously, which can save you money on auto insurance. You can call an independent property and casualty agency, and they will use auto policy rating tools to do the same for you, in less than 60 seconds. Make sure to use a separate junk email address.

Once insurance agents smell an interested customer, it’s hard for them to let go.

Lesson 4: Drive a Safer Car

The Insurance Institute for Highway Safety (known by the easily said and popular acronym IIHS) test-drives new cars and rates them for safety. These ratings are esteemed by auto manufacturing companies.

The highest ratings are Top Safety Pick+ and Top Safety Pick. You can find the 2021 award winners here. The ratings are broken down by small, medium, and large vehicles; standard and luxury; SUV’s, minivans, and pickup trucks. analyzed how much lower insurance premiums are for safer vehicles versus the national average. For each category, safer cars were cheaper than the national average for similar sized vehicles. The savings can be significant.

So what is a safer car? Safer cars may include forward-collision warning, automatic emergency braking, pedestrian detection, lane departure warning, lane keeping assist, blind spot warning, rear cross-traffic warning, rear automatic emergency braking, lane-centering assist, and adaptive cruise control features, according to the same report.

Click to Learn More!

Larger vehicles are safer than smaller ones, as they can better absorb the energy of a crash, having more volume to spread out the force of the impact.

I am biased toward electric vehicles, since I own a Tesla. One of the main reasons was its superior safety scores. The National Highway Traffic Safety Administration ( performs their own tests on the safety of a vehicle. Here is a screenshot of NHTSA’s test results from the Model 3.

We will see more electric vehicle models in 2021. Electric vehicles forgo the combustion engine and are powered by thousands of battery cells. Popular designs have the battery built into the bottom of the car. The extra space in front is used to enhance the safety of the vehicle with better impact protection, a rigid structure, and reduced rollover risk.

Electric vehicle manufacturers can use the extra space to expand the interior space of the vehicle in a smaller car as well.

As we see more electric vehicles produced, the cost of these cars will decrease and they will enter more vehicle types such as SUVs, luxury cars and trucks.

Source: Tesla Model 3 website

Once the IIHS and insurance companies test and insure more electric vehicles, there’s a good chance insurance premiums will come down. Here’s a structural view of a Tesla Model 3.

Do your research when you buy a new or used car. See what cars are safe, fun, and aesthetically pleasing. I’ve been in my share of accidents and I can tell you safer cars protected my family.

With this research, you should be well on your way to finding affordable insurance.

Neither CentSai Inc. or any of its columnists endorse the use of any products mentioned here.

Options to Add Additional Coverages