3 Ways to Save Money on Car Insurance Today

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If you are anything like me – you know you have it, you know it costs you money, and you are always wondering if you are somehow getting screwed (overpaying is the professional way to say it). I want you to start keeping more of your money, and you can start with saving more money on your car insurance.

Let’s Start with the Basics

Premium – This simply means how much you are going to pay to the insurance company each month

DeductibleThis is how much you have to pay out of your pocket if you were to file a claim from a car accident or if you woke up and a tree fell on your car

Now, let’s take a look at these two things and see how you can save money right away!

The amount you pay in premium is based on how much risk the insurance company is going to take versus how much you are going to take. If you raise your deductible and take on more risk, the insurance company will usually lower your premium each month.

We used to carry a $500 deductible, which meant if a tree fell on our car we would pay $500. However, if a shopping cart conveniently smashed into the side of our car and it cost only $550 to repair, wouldn’t I rather pay the repair out of pocket to avoid the claim on our insurance?

Say “Yes”.

Remember, a claim often results in our premiums going up each month. No bueno.

Car Insurance Tip #1:

Once you have at least a $1,000 emergency fund, raise your deductible to lower your premium each month

Break Even Analysis

A way to calculate to see if this is worth it is to do a break-even analysis. Don’t worry – the sophisticated money-talk is once again very simple. I think the financial world comes up with these amazing words and phrases to trick us into thinking this stuff is complicated. Remember, most of it is 5th grade math.


You talked with your agent and want to raise your deductible from $500 to $1,000. Your agent says your premium will decrease by $25/month. If you decide to do this, realize you are taking on $500 more risk to save you $25/month. Therefore, it will take 20 months to break-even ($25/month x 20 months = $500) and then everything after that is extra money in your pocket. You decide if it is going to be worth it or not.

Also, insurance agents may be paid based on your premium each month. If you are asking to lower your premium, they may try to talk you out of it. Don’t be mad at them, they are simply doing their job – just be aware.


ways to lower your car insurance


What does this 100/300/100 mean?

These numbers are EXTREMELY important to understand! Here is a very simple, straight-forward way to remember them.


The first number represents how much your insurance company will pay in thousands, PER PERSON, for any injuries you cause.



The second number represents how much your insurance company will pay in thousands, for TOTAL INJURIES you cause per accident.



The third number represents how much your insurance company will pay in thousands, for TOTAL PROPERTY DAMAGE you cause per accident. Property includes anything that will have to be replaced or repaired following an accident you cause.



David and Cindy were driving in their $45k car when David dropped his cell phone on the floor. He reached down to pick it up, and in an instant collided with another vehicle ($30k) and took out a light pole ($22k). David was able to walk away but…

  • Cindy’s injuries total: $180,000


  • The driver of the other vehicle: $85,000


  • The passenger of the other vehicle: $60,000


  • Total Injuries: $325,000 ($180,000 + $85,000 + $60,000)


  • Property Damage: $97,000 ($45k car + $30k car + $22k)


David better hope he is carrying more than the standard 100/300/100 coverage or he is going to be in trouble. If he is carrying the typical 100/300/100, then David is going to be responsible for everything over what the insurance company will not pay. In this scenario, David will be responsible for:

  • $80,000 for Cindy’s injuries (David is only covered for up to $100k per injury)


  • $25,000 (David is only covered for up to $300k for total injuries per accident)


  • Total David is responsible for: $105,000    (Holy Crap!)


Once we realized what these numbers represented, we got on the phone with our agent and made sure we had the right coverage.

We increased our coverage to 250/500/500 and raised our deductible to the max, which is $1,000 with our insurance provider.

However, there was still something else we could do to protect our assets from disaster – An Umbrella Policy, which moves us into Car Insurance Tip #2.

Car Insurance Tip #2

Further Cover yourself with an Umbrella Policy

What is an Umbrella Policy?

An umbrella policy is straightforward and simple. It is extra coverage at an extremely affordable rate to further protect your assets. When your limits have been reached on your auto (or home) policy following an accident, your umbrella kicks in.

We have an umbrella policy for $1 million – when disaster strikes, we are covered beyond what our auto and/or home insurance will cover, up to $1 million.

A typical umbrella policy for $1 million costs around $250/year depending on where you live. If you currently have any assets at all, or will be building some sort of wealth in the near future, I would HIGHLY recommend you purchase an umbrella policy. It’s simple – do it!

Note: Depending on your insurance provider, you may need to max out your auto and/or homeowner’s limits to become eligible for an umbrella

Discounts, Discounts, & Discounts

Now that you are aware about your auto insurance and umbrella policy, the next thing is to shop around. The Wall Street Journal reported that 38% or insurance buyers do not research insurance products before purchasing a policy.

What is worse – 40% of insurance buyers are not confident if they have enough or even the right amount of insurance! No wonder everyone feels like they are getting screwed – however today you just received a little knowledge fist bump from me to you. Pow!

If you aren’t checking into your policy and shopping around, you are losing money. Period. There are so many discounts out there and you are going to be disappointed if you think your insurance company is going to call to remind you to apply for them. Here is a list of some – not all–  of the discounts available:

  • Multi-Car Discount
  • Car and Home Discount
  • Car and Life Discount
  • Alternative Fuel Discount
  • Anti-Lock Brake Discount
  • Accident-Free Discount
  • Defensive Driving Course Discount
  • Affinity Group Discount (do you belong a group or profession)
  • College Graduate Discount
  • Good Student Discount
  • Paid in Full Discount
  • Married Discount
  • Senior (55 and older) Discount
  • Many, many more – you need to shop around and ask!


Car Insurance Tip #3

Shop around every 2 years for Auto Insurance Quotes

Esurance is our favorite way to get started with a FREE quote. Esurance will give you multiple auto insurance quotes all on the same page so you don’t have to go to each insurance company individually.

It is simple, easy, and straightforward. You may be throwing money out of your car window every month and not even realize it! By doing this today, you are taking another step towards taking care of your money now so it will take care of you later! It’s easy, it’s simple, and it’s your money! Why is this hard again? 

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This money stuff isn’t taught anywhere and it needs to be on the minds of people just like you. What would the world be like if we didn’t have debt payments each month? How would people feel if they no longer had the stress about money? How much more fun could we have if money was no longer the #1 problem in life?

Someone out there needs to see this. It’s helpful, it’s needed, and most importantly – you get to help get the word out.

Thanks for your loyal support,

-Chris Peach

Chris Peach Author 150x150

Chris Petrie

Chris (Peach) Petrie is a personal finance expert, money coach, speaker and podcaster.

In 2011, Chris and his family were exhausted from living paycheck-to-paycheck and facing a mountain of debt. They started going against the society standards of misbehaving with money and made the decision to take back control of their lives and money. Within seven months they paid off $52,000, started saving like crazy and began building real wealth.

The word spread fast and Chris started showing friends how to create a budget over dinner. Soon after he started showing their friends how to do the same and eventually Chris started teaching personal finance classes around the community. As the need for the classes grew, Chris launched Money Peach in 2015.

Money Peach was created to help everyday people remove the stress and fear of money by showing them how to save more, make more, and keep more of their money.

Chris Peach has been featured in places like Business Insider, The Huffington Post, Elite Daily, and CheddarTV.

When Chris isn’t at “work” he can be found at the Crossfit gym or riding on the fire truck — Chris is also a full-time firefighter in Phoenix, Arizona.


  • I just switched to Safeco today and upped my coverage and deductible and it will save us $950 a year. Thanks for the tips!

    • Whitney! This is so awesome:) Thank-you for sharing and do something awesome with that extra $950 a year.

  • Awesome article Chris! As a professional in the insurance world it’s great to know that I have an advocate for proper limits and not just simply, “the least expensive price.” Protecting your assets is the true purpose of an insurance policy and your article definitely helps illustrate that fact.

    • Thank you Lennox! That means a lot coming from someone in the insurance world. I appreciate it!

  • Chris, I don’t see that you have uninsured & under insured? What do you think is a good amount for these?

    • Hi Vicki,

      Great question! The rule of thumb from the insurance experts is to match uninsured & under insured motorist to whatever your liability limits are. It’s also one of the least expensive types of insurance coverage and on average will cost you $1 – $3 a month. It’s a no brainer so make sure you have it. Thanks for reading!

  • I just have liability on a 15 year old car I could care less about, do you advise against that or how does that work, I’ll still be covered for medical coverage on myself right?

    • Hey Will 🙂

      I think you may be referring to “collision” coverage. Collision coverage covers the cost/repairs to your own vehicle. Therefore, you can drop your collision and possibly save some on your monthly premiums. Before you do this, check w/ your insurance provider to see how much savings there will be yearly. If you’re car is worth $5,000 and you only save $40/year for collision, then defintely don’t drop the coverage. However, if you can save $200/yr, then you would break even in 2.5 years and I would say it is a great plan. Collision rates are dirt cheap though, and you may find you’re only paying a few bucks a month for it. Great question Will 🙂

  • I like your idea to choose an umbrella policy. That way you know you have coverage, and it’s affordable. Personally, the idea of an affordable insurance that covers a lot is very appealing. I am going to look into getting an umbrella policy.

    • Umbrella polices are so cheap too. Depending on where you live, you can add $1,000,000 for $20-$30 a month! More people would have umbrella policies if they simply knew about it. Thanks for the comment Melody! ?

  • These are some great money saving tips. I didn’t know that raising your deductible could lower your premium so much. We’ll have to see if that’s something we could do!

    • Jenkins,

      Since you are raising your deductible, you are then taking away some of the risk from the insurance company and placing it onto you. Always do a break-even analysis, meaning this: Compare how much more risk (deductible) you are going to take on yourself and compare that to how much money you will save. If it takes you a year to break-even, it may be worth it. If it takes you 5 years (no accidents) to break even, I probably would shop around.

      Good luck Jenkins 🙂

  • I have several cars and been using different car insurances from different companies and yes they have good offers but I am planning to transfer them and focused on to 1 company so that I have them all intact. This post is such a big help. Thanks!

  • Great information here! One of the things I’d like to point out is how you mentioned to shop around every two years. I think that is a great idea to compare your current rate with other companies on the market. Plus, if others offer lower rates, you could see if your current company will match or beat their competitors rate. I’m all for saving money and doing that should work well!

  • I like your tip about having an umbrella policy for your car insurance. Where I grew up, flooding was really common in the spring. An umbrella policy can help protect your vehicle against flood or water damage. Check your region for potential risks and make sure that you have them covered should the worst happen. Thanks for your post.

  • My dad just told me that I’ve been kicked from his insurance and need to start finding my own. I never realized how much goes into this process and I honestly have no idea what I’m looking for. This helped me understand the basic terminology of it and I hope that I can use these to help me find a good provider and save money during the process as well.

  • Yeah I’m with Jason on this – I am completely new to insurance shopping and had no idea what the 100/300/100 (and similar terms) meant. Thanks for explaining!

  • Being an insurance agent I appreciate this information. Things to consider when choosing liability limits and deciding on an umbrella policy would be a) what is your net worth ( do you have investments, own a home, have a retirement account you pay into) b) what is your level of risk? (Do you have a youthful driver, are you a youthful driver or do you drive a very large vehicle that can do some serious damage) and lastly, what are your driving habits? Do you take your car out for only quick trips but mostly use public transit or are you a heavy duty commuter that is exposed to being in an accident more frequently? Also, people will tend to carry low liability on their auto policy to help with cost and huge amounts of liability on their home or renters policy, DO NOT do this! Keep liability limits similar across all policies to avoid coverage gaps to protect you financially! Shop on! 🙂

    • Hi Diana,

      Thank-you so much for your comment and adding some really great points to this article. I appreciate you taking the time to do this and for providing value for everyone! You rock 🙂 Thanks again!

  • My wife works for an insurance company and one thing that seems to crop up a lot is people thinking that their insurance will go up if their insurance company “finds out” about an accident. This makes them file 3rd party, which makes everything take longer. A) Your insurance company will certainly find out. B) If you’re not at fault, your rates won’t go up. C) Wouldn’t you rather file with your own company, who is more likely to fight on your behalf?

  • It really helped when you said that raising the deductible will make the insurance company lower the premium. I will share this information with my best friend since he will be buying one for the first time. This will help him a lot since he is on a limited budget because of buying his car right after getting a new house.


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