How to Save on Auto Insurance in Retirement

1. Reassess Your Coverage Needs

Auto insurance can be a major expense, and it's important to reassess it when your financial situation changes in retirement.

Your driving habits, and even the car you drive, may shift as you enter retirement. For example, you may be driving less, downsizing to a smaller car or paying off your current one. Now is a good time to review your policy and ensure you're not paying for more coverage than necessary.

Talk to your insurer to identify ways your coverage could adjust to your new driving circumstances. Here are some auto insurance policy specifics you might review.

Coverage Level

You may not need to carry high levels of coverage if you're driving less. With a reduced likelihood of a serious accident, you might consider lowering your bodily injury coverage amounts. On the other hand, you could opt for higher liability limits if you're concerned about protecting your assets if you're involved in an accident and the other driver sues you.

Learn more: How Much Car Insurance Do I Need?

Type of Insurance Carried

Review the types of coverage you carry to see if they're still necessary. If you're no longer making payments to a lender or leasing company, you might consider dropping comprehensive and collision coverage from your policy.

However, since comprehensive insurance is fairly affordable—costing $290 on average per year, according to the Insurance Information Institute—it may be a small price to pay for protection against theft, weather-related events and other damage your car sustains when you're not driving it.

Annual Mileage

If you're driving less, you may qualify for lower premiums. Reduced driving decreases the likelihood of getting into an accident and filing a claim for vehicle damage.

Learn more: How to Drive Less and Reduce Your Insurance Costs

Type of Vehicle

The type of car you drive can impact how much you pay for auto insurance. On one hand, downsizing to a smaller economy car could lower your premiums, especially if your current car is a more expensive luxury vehicle. On the other hand, newer vehicles tend to carry higher premiums since the costs for repair and replacement are typically higher than for older vehicles.

Learn more: What Are the Cheapest Cars to Insure?

2. Consider Usage-Based or Pay-Per-Mile Coverage

Many auto insurers offer alternatives to traditional insurance to help you stay on budget, such as pay-per-mile insurance rates and usage-based coverage. If your driving mileage is low, these policies may work in your favor.With pay-per-mile insurance, you'll typically pay a set rate for every mile you drive on top of a base premium. By contrast, usage-based insurance policies are broader in scope and may reward you for safe driving habits. Using a telematics device in your car, your insurer can track how many miles you drive, your speed, braking patterns and other driving behaviors.

3. Review Your Deductibles

Increasing your deductible is one of the easiest ways to lower your car insurance premiums. If you have enough savings to cover higher out-of-pocket costs in the event of an accident, ask your insurer how much you could save.

Be careful not to raise your deductible beyond what you could comfortably afford out of pocket if you need to file a claim.

4. Ask About Discounts

Ask your agent what discounts you may qualify for that could significantly lower your premiums. For example, GEICO offers a discount of up to 22% on most coverage if you're not involved in an accident for at least one year.

Many discounts are designed specifically for seniors, including mature drivers, low-mileage and defensive driving discounts. You may also qualify for other discounts, such as:

• Military and federal employee discounts
• Multi-policy discount
• New vehicle discount
• Air bag, anti-lock and anti-theft system discounts

Tip: Factor in your location when looking for ways to save. You may be eligible to get a lower rate if you've moved to a new area since auto insurance rates vary widely from state to state and even town to town.

5. Shop Around and Negotiate

Follow these steps to save on auto insurance so you can spend more of your money enjoying your retirement:

• Get quotes from multiple insurers. Requesting quotes from at least three auto insurance carriers can help you find the best rate. Most insurers offer quotes on their websites, over the phone or in person at an office location. Independent agents aren't tied to one insurer and can check rates and coverage options with several companies at once.
• Review your quotes. The best way to get an accurate quote comparison is to make sure the quotes are for the same coverages. Keep in mind, your state likely requires you to carry liability insurance. Similarly, if you're financing your vehicle, the lender or leasing company typically requires you to carry full coverage, including collision and comprehensive. Make sure your lender's car insurance requirements are accounted for in your quotes.

Tip: Reviewing your auto insurance options regularly, ideally once every year, and getting quotes from several insurers can help make sure you have the most cost-effective policy.

Learn more: How to Compare Car Insurance Rates

View Several Car Insurance Quotes Side by Side

Many states allow auto insurance companies to use credit-based insurance scores when calculating your rate. While this score differs from traditional credit scores, it includes many of the same scoring factors. You may want to review your credit report and FICO^® Score^Θ for free to address any issues you discover before shopping for car insurance rates.

When you're ready to get policy quotes, consider streamlining the process with Experian to receive multiple free quotes in minutes.