Whittle down what you pay on car insurance

Q: I used to drive some distance to the office but now work from home. Am I eligible for a low-mileage discount?

A: Most auto insurers offer such a discount when your annual mileage drops below 7,000 or 7,500, which is significantly less than the typical 12,000 miles most Americans drive a year, according to Michael Barry, chief communications officer for the Insurance Information Institute (III).

Q: Is it possible to save on paying high auto insurance premiums by paying a higher deductible?

A: It’s not right for everyone, but paying a higher deductible could save you big bucks on premiums. For example, raising your deductible from $200 to $500 could reduce the cost of your collision and comprehensive coverage by 15% to 30%, according to the III. “Going to a $1,000 deductible can save you 40% or more,” the institute says. Just be sure to keep a cushion in your savings account so you can pay that higher deductible should the need arise.

Q: I’m considered to be a safe driver. But I feel that I’m spending too much on car insurance for unnecessary coverage. Is it possible to drop unnecessary coverage from my auto insurance?

A: Although most people tend to be underinsured, it’s possible your policy includes coverage you don’t need, says Chaya Milchtein, automotive educator and founder of Mechanic Shop Femme in Milwaukee, Wisconsin. For instance, if you already own multiple vehicles, coverage that pays for a rental car when yours is in the repair shop is probably superfluous, and collision coverage may be unnecessary if your vehicle is so old that even a minor accident would likely result in the need for a replacement.

But don’t be too quick to drop coverage for collision, comprehensive or both. Comprehensive coverage protects you in the event of theft, vandalism or damage from a storm or hitting a deer, for example. Most leasing companies require both collision and comprehensive, as do lenders for financed vehicles. States also have minimum requirements. Four out of five U.S. drivers purchase these optional coverages, according to a 2018 report from the National Association of Insurance Commissioners. “Comprehensive coverage is significantly less expensive than collision and should only be dropped with great reluctance,” Barry says.