Each month, millions of people write a check to their insurance company without ever asking whether they’re paying too much.
The truth? Most of them are.
Insurance premiums are one of those expenses that inexorably siphon dollars from your bank account month after month, year after year. You set it up one time, add autopay and never think of it again. And that’s precisely what insurance companies rely on.
But here’s some good news: dialing back your premiums doesn’t have to mean skimping on your protection. That means being more strategic about how you shop, when you shop, and what you ask for.
This guide explains 11 expert tips for saving on premiums — including quick wins you can apply today and long-term strategies that add up to significant savings over time. No confusing jargon. No complicated formulas. Just practical changes that really work.
Let’s get into it.
Why Your Premium Is Likely Higher Than It Should Be
Before you dive into the strategies, it helps to remember why you’re overpaying in the first place.
Insurance companies are businesses. Their aim is to collect more money in premiums than they disburse in claims. In doing so, they price risk — and some of the time they don’t get it right for your particular circumstances.
Pile on top of that the fact most people don’t shop around, don’t ask about discounts and don’t read their policies. The result? Millions of people who pay for coverage they don’t need, at prices that haven’t been adjusted in years.
The strategies below are meant to remedy all that.
Method 1: Compare Plans Every Year
This is the single biggest thing you can do to save money on premiums — and also the most overlooked.
Insurance rates change constantly. Companies tailor their pricing according to claim trends, competition, new customers and dozens of other factors. The company that offered you the best rate two years ago may now be the most expensive choice.
How Much Can Shopping Around Save You, Actually?
Research shows that loyal customers tend to pay more compared with new customers at the same company. Insurers often give their best rates to lure new business — not the people who have stayed.
| Shopping Frequency | Estimated Annual Savings Potential |
|---|---|
| Never shopped | Probably overpaying 20–40% |
| Shopped more than three years ago | Probably overpaying 10–25% |
| Shopped in the past year | Closer to market rate |
| Shopped and switched | Maximum savings potential |
Make it a habit. Every 12 months, set a calendar reminder to obtain at least three competing quotes. Even if you don’t change, you’ll know where you stand.
Way #2: Increase Your Deductible (In a Smart Way)
Your deductible is the portion you pay out of pocket before your insurance starts covering costs. The more you have in deductible, the less you pay for premium.
Most people keep their deductible low, which feels less scary. But for most people, choosing a higher deductible for a lower monthly premium is the more intelligent financial choice.
The Math Behind This Strategy
Suppose that lifting your deductible from $500 to $1,500 saves you $30 per month. That’s $360 per year. In only three years, you’ve saved $1,080 — enough to more than pay for the higher deductible if something goes wrong.
The only catch: you have to have the deductible amount in savings. Don’t increase your deductible to a level you wouldn’t actually be able to pay if a claim were filed.
A great rule of thumb is to choose a deductible that you can cover easily from an emergency fund. Then, every month, pocket the premium savings.
Way No. 3: Bundle Your Policies — But Do the Math First
Bundling means purchasing multiple insurance policies from one company — usually home and auto together. Most insurers give a 5–25% discount when you bundle.
It sounds like an easy win. And often it is.
But here’s what most people overlook: bundling isn’t automatically the least expensive choice. Sometimes it’s cheaper overall to buy each policy from a different insurer — even with no bundle discount.
Before You Bundle, Do This
Obtain separate quotes from several companies for each policy. Then compare the bundled total with the best individual rates. Bundle only if the math honestly works in your favor.
| Scenario | Annual Cost Example |
|---|---|
| Bundle with Company A (home + auto) | $2,800 |
| Home with Company B + Auto with Company C | $2,500 |
| Savings by NOT bundling | $300/year |
Don’t assume. Always verify.
Manner #4: Inquire About Every Discount
This one sounds obvious. But most people never do it.
Insurance companies have long lists of discounts to offer. Most of them are never applied automatically. You have to know to ask — and then make the request.
Discounts That Most People Don’t Realize Are Available
| Discount Type | Who Qualifies |
|---|---|
| Good driver discount | No accidents or violations in 3–5 years |
| Good student discount | Students with GPA of 3.0 or higher |
| Low mileage discount | Drivers under 7,500–10,000 miles per year |
| Home security discount | Homes with alarm systems, cameras or smart door locks |
| Loyalty discount | Long-term customers (3+ years) |
| Paperless billing discount | Customers who choose to receive digital statements |
| Paid-in-full discount | Payments of the full annual premium upfront |
| Military/veteran discount | Active duty and veterans |
| Professional association discount | Members of certain unions or organizations |
| New home discount | Recently built or newly bought homes |
When you talk to an agent, ask directly: “What discounts do I qualify for that aren’t automatically applying to my policy?” That question can sometimes unlock savings you’ll never uncover on your own.
Way No. 5: Run Better Credit Before You Renew
For the most part, your credit score directly influences your insurance premium in all but a few states. Insurers use a variation of your credit score — an insurance credit score — to assess how likely you are to file a claim.
Having a better credit score can mean significantly lower premiums. And a lower score can cost you hundreds of dollars a year — often with you none the wiser.
How Improving Your Credit Affects Your Premium
| Credit Score Improvement | Estimated Premium Effect |
|---|---|
| Poor to Fair | Up to 30% reduction |
| Fair to Good | Up to 15% reduction |
| Good to Excellent | Up to 8% reduction |
Note: The effects vary by state and insurer. States including California, Hawaii and Massachusetts prohibit such practice.
Steps to enhance your insurance credit score include paying bills on time, reducing balances owed, disputing errors on your credit report, and not opening multiple new accounts at once.
When your score does improve, call your insurer and have them re-run your rate. Most companies won’t do this by default.
Way #6: Usage-Based or Telematics Programs
Many auto insurers now offer telematics programs — apps or devices that monitor your actual driving behavior. Safe drivers are rewarded with significant discounts — based on actual data rather than statistical assumptions.
These programs track things like:
- How fast you drive
- How hard you brake
- What time of day you drive
- How many miles you log
Is It Worth It?
For safe, low-mileage drivers, absolutely. Discounts can run from 5% up to as much as 40% with some insurers. Programs such as Progressive’s Snapshot, Allstate’s Drivewise and State Farm’s Drive Safe & Save are widely available.
The catch is that you share driving data with your insurer. The savings greatly exceed the privacy consideration for most safe drivers. But for less-than-perfect driving habits, these programs could backfire and actually increase your rate.
7th Way: Remain Claims-Free
Every claim you make is entered into a national database known as CLUE — the Comprehensive Loss Underwriting Exchange. This gets recorded against you for seven years and impacts every future quote you’ll be given.
One of the most effective long-term strategies for controlling premiums is to file fewer claims in the first place — particularly for minor incidents that hardly exceed your deductible.
The Real Cost of a Small Claim
| Scenario | Numbers |
|---|---|
| Damage amount | $900 |
| Your deductible | $600 |
| Insurance payout | $300 |
| Annual premium increase (estimate) | +$180/year |
| Total extra premiums over 3 years | $540 |
| Net loss from filing the claim | $240 |
That claim cost you more than it saved you. Pay small damages out of pocket and maintain your claims-free discount.
Way #8: Review and Trim Your Coverage Each Year
Life changes. Your insurance needs to change with it.
Lots of people are paying for coverage they don’t even need. If the car’s value is low, an older paid-off vehicle doesn’t require comprehensive and collision coverage. A grown child who has moved away from home does not need to be on your home insurance rider. You do not have to include a business you closed on your policy.
Coverage That’s Commonly Over-Purchased
Here are some common areas of over-insurance:
Collision/Comprehensive on Older Vehicles: If your car is worth less than $4,000 and you pay $600 per year for these coverages, you’re spending too much for too little protection. A total loss payment would hardly eclipse what you’ve already shelled out in premiums.
Duplicate Coverage: Rental car coverage through your auto insurer when your credit card already covers rental cars. Roadside assistance from your insurer when you already paid for AAA. Before adding a rider, always check if it overlaps.
Life Insurance After Major Payoffs: If your mortgage is paid off and your children are grown, you may not need the same level of life insurance that you purchased 20 years ago.
Once a year — ideally before your renewal date — sit down and go through your policy line by line. Ask: do I still need this?
Tip #9: Pay Your Premium Annually Instead of Month-to-Month
This one is easy, and it gets overlooked in many situations.
Insurance companies generally impose a fee for monthly payment plans. It may be referred to as an “installment fee” or simply built into a slightly higher monthly rate. One way or another, you’ll be paying more for the convenience of spreading your payments out.
How Much Could You Save?
| Payment Type | Yearly Premium | Monthly Rate | Total Paid |
|---|---|---|---|
| Annual (lump sum) | $1,200 | N/A | $1,200 |
| Monthly installments | $1,200 + fees | $107/month | $1,284 |
| Additional cost of monthly | — | — | $84/year |
That $84 example is modest. For bigger policies — home insurance, commercial coverage — paying annually can save $150 to $300 or more a year.
If cash flow is an issue, budget a portion each month to go into a dedicated savings account and pay the annual premium when it comes due. You’ll earn a little interest and avoid the installment surcharge.
Ways #10: Get Ahead With Home Improvements
For homeowners, some upgrades will directly lower your insurance cost. Insurers reduce rates when your home becomes less risky to insure. That means less risk of fire, theft, water damage or weather-related claims.
Home Improvements That Will Reduce Your Premium
| Improvement | Potential Premium Reduction |
|---|---|
| New roof (using impact-resistant materials) | 5–30% |
| Security system with monitoring | 5–20% |
| Smoke detectors and sprinkler systems | 2–10% |
| Storm shutters or reinforced garage doors | 5–15% |
| Updated electrical wiring | 5–10% |
| Backup generator or sump pump | 2–8% |
The trick is to inform your insurer once you make these upgrades. Most companies won’t automatically adjust your rate — you need to let them know what has changed.
Some upgrades you’ll recoup more quickly than you might think when factoring in the annual premium savings.
Method #11: Partner With an Independent Insurance Agent
This is the strategy that ties everything else together.
Insurance agents come in two types: captive agents and independent agents. Captive agents can only offer products from the one company they work for. Independent agents work with dozens of carriers and will shop the entire market for you.
If you’re dealing with a captive agent, you’re only getting a tiny slice of the potential choices. An independent agent can shop rates from a host of insurers, uncover discounts you never heard about and create a policy that actually fits your life — not just the roster of one insurer.
Captive vs. Independent: A Direct Comparison
| Feature | Captive Agent | Independent Agent |
|---|---|---|
| Number of carriers | 1 | 10–50+ |
| Can get you the lowest rate | Limited | Yes |
| Shops the market for you | No | Yes |
| Better for unusual situations | Rarely | Usually |
| Loyalty rewards with one insurer | Sometimes | Varies |
Independent agents are particularly useful when your circumstances are complicated — multiple properties, a home-based business or a spotty driving record. They have more tools to land you a competitive rate.
You can find vetted independent agents through the Independent Insurance Agents & Brokers of America (IIABA) directory at TrustedChoice.com.
And if you want more general guidance on managing your finances alongside your insurance decisions, Global Health Financial is a solid resource for practical financial tips and strategies.
Your Premium-Savings Checklist at a Glance
| # | Strategy | Effort Level | Savings Potential |
|---|---|---|---|
| 1 | Shop around annually | Low | High |
| 2 | Raise your deductible | Low | Medium–High |
| 3 | Bundle (after checking the math) | Low | Medium |
| 4 | Ask about all discounts | Low | Medium–High |
| 5 | Improve your credit score | Medium | High |
| 6 | Use telematics/usage-based programs | Low | Medium |
| 7 | Remain claims-free | Ongoing | High |
| 8 | Trim unnecessary coverage | Low | Medium |
| 9 | Pay annually instead of monthly | Low | Low–Medium |
| 10 | Make qualifying home improvements | Medium–High | Medium |
| 11 | Work with an independent agent | Low | High |
FAQs
Q: How much can I actually save in premiums by doing these things? It all depends on your situation. People who have never shopped around, and may also have room to boost their credit score or trim their coverage, can typically find savings of 20–40% or even more per year. Just using two or three of these strategies can save you hundreds of dollars every year.
Q: Should I raise my deductible, and is that a safe thing to do? Yes — if you have sufficient savings to pay for it. The rule of thumb is: raise your deductible only to an amount you could comfortably pay without stressing your finances. If your emergency fund can handle a $1,500 deductible, the savings on premiums is often well worth it.
Q: Will seeking out quotes hurt my credit score? No. Insurance companies perform “soft pulls” on your credit when providing a quote. Soft pulls have no impact on your credit score. You can get as many quotes as you want without any credit impact.
Q: What is a telematics program, and should I sign up for one? A telematics program tracks how well you drive via an app or a device in your vehicle. Discounts of 5–40% are available for safe drivers. If you drive fewer miles and are a cautious driver, it’s worth signing up. It may not be much of a help if you drive aggressively, frequently, or during high-risk hours.
Q: How often should I be reviewing my insurance coverage? At least once a year — better yet, 30 to 60 days before your renewal date. Also review anytime you have significant life changes, such as purchasing a house, tying the knot, bringing kids into the world, paying off your vehicle or retiring.
Q: Are insurers allowed to use credit scores in pricing in all states? No. California, Hawaii, Massachusetts and Michigan prohibit or severely limit the use of credit scores in pricing insurance. Contact your state’s department of insurance to learn how the rules apply in your area.
Q: What’s the quickest way to start reducing premiums now? Call your current insurer and ask two questions: “What discounts am I getting now?” and “What additional discounts can I get?” Then have at least two or three other companies provide competing quotes. These two steps alone can expose significant savings in a single phone call.
The Bottom Line: Small Moves, Big Savings
Getting savings on premiums is not about a magic trick or gaming the system. It’s about being an engaged, educated consumer in a field that makes money off your passivity.
All 11 strategies in this guide are legal, pragmatic and at your disposal right now. Some take five minutes. Others take a few months to pay off completely. But all of them push you in the right direction.
Tackle the low-hanging fruit first: comparison shop, inquire about discounts and examine coverage you no longer need. Then build in the longer-term strategies — strengthening your credit, maintaining a clean claims history and making your home safer.
The insurance industry is banking on you remaining on autopay and never asking a question. This guide provides you with all the reasons to do the opposite.
One strategy at a time. One renewal cycle at a time. That’s how you quit overpaying — and start keeping more of your own money.
