The single most effective way to get better insurance rates is to shop around and compare quotes from multiple carriers, but that’s only the starting point. Your credit score, deductible choices, bundling options, and willingness to share driving data can each shave 10% to 40% off your premiums. Stacking several of these strategies together can cut your costs dramatically.
Improve Your Credit Score First
Your credit history is one of the biggest factors insurers use to set your premium, and the gap between tiers is enormous. Drivers with poor credit pay an average of $4,745 per year for full coverage auto insurance, compared to $2,318 for drivers with excellent credit, according to Bankrate’s 2025 rate data. That’s 105% more for the same coverage simply because of a lower credit score.
You don’t need perfect credit to see savings. Moving from poor to average credit drops the national average annual premium from $4,745 to $2,947, a savings of roughly $1,800 per year. And the jump from average to good credit saves another $250 or so. If you’re planning to shop for insurance in the next few months, paying down credit card balances and correcting errors on your credit report can make a meaningful difference in the quotes you receive. A few states prohibit insurers from using credit scores in pricing, but most allow it.
Raise Your Deductible Strategically
Your deductible is the amount you pay out of pocket before your insurance kicks in. Choosing a higher deductible lowers your premium because you’re taking on more of the risk yourself. According to the Insurance Information Institute, increasing a homeowners insurance deductible from $500 to $1,000 can reduce premiums by up to 25%. Bumping from $1,000 to $2,500 can save around 24% more. Auto insurance follows a similar pattern, though the exact percentages vary by carrier.
The math works in your favor if you rarely file claims. On a $3,000 annual premium, a 25% savings means $750 back in your pocket each year. You’d only need to go about seven months without a claim to break even on the extra $500 in out-of-pocket risk. The key is making sure you can actually afford the higher deductible if something does happen. Setting aside the deductible amount in a savings account turns this into a reliable way to lower your costs without exposing yourself to financial stress.
Bundle Your Policies
Buying multiple policies from the same insurer, typically home and auto, triggers a multipolicy discount that can range from 10% to 40% depending on the carrier. Some insurers advertise savings of up to 30%, while others go higher. The discount applies to both policies in most cases, so the total dollar savings can be substantial.
Bundling is worth pursuing, but don’t assume it’s automatically the cheapest option. Sometimes buying standalone policies from two different carriers still costs less than a bundle from a single insurer, especially if one company is significantly cheaper for auto and another for homeowners. Get quotes both ways: bundled from three or four insurers, and standalone from the cheapest auto and home carriers separately. Compare the totals.
Use a Telematics Program
Telematics programs, sometimes called usage-based insurance, let your insurer track your driving habits through a mobile app or a plug-in device. If you drive safely, you earn a discount. If you don’t drive much, you save even more through pay-per-mile options.
The savings potential is real. Most major carriers offer a 5% to 10% discount just for enrolling, before any driving data is collected. After a policy period (usually six months), safe drivers can earn renewal discounts of 30% to 50%. Farm Bureau’s Driveology program offers up to 50% off for safe driving. Nationwide’s SmartRide can deliver up to 40%. State Farm, Travelers, and USAA each offer up to 30% at renewal for good driving behavior.
These programs typically track hard braking, rapid acceleration, phone use while driving, time of day you drive, and total mileage. If you’re a calm, low-mileage driver who mostly avoids late-night trips, telematics can be one of the largest single discounts available to you. If your driving habits aren’t great, some programs won’t raise your rate based on the data, but others might. Read the terms before enrolling.
Shop Around and Requote Regularly
Insurance companies use different pricing models, weigh risk factors differently, and adjust their rates on different schedules. Two drivers with identical profiles can see quotes that vary by hundreds or even thousands of dollars across carriers. Shopping around at least once a year, and especially before each renewal, is the most reliable way to avoid overpaying.
Get quotes from at least four or five insurers. Include at least one direct writer (a company that sells policies through its own website or agents) and one independent agent who can quote multiple carriers at once. Make sure you’re comparing identical coverage levels, deductibles, and limits across all quotes. A cheaper premium that comes with lower liability limits isn’t actually a better deal.
Life changes also trigger opportunities to save. Getting married, turning 25, buying a home, retiring, or switching to a shorter commute can all lower your rate, but only if your insurer knows about them. Update your policy details whenever your situation changes, and use those changes as a reason to shop around.
Choose the Right Coverage Level
Carrying more coverage than you need inflates your premium, but carrying too little creates dangerous gaps. The sweet spot depends on what you’re protecting. For auto insurance, most financial planners suggest liability limits well above your state’s minimum, typically 100/300/100 (meaning $100,000 per person, $300,000 per accident for bodily injury, and $100,000 for property damage). State minimums are often too low to cover a serious accident.
Where you can save is on optional coverages that no longer make sense. If your car is worth less than $5,000, carrying collision and comprehensive coverage may cost more over a few years than the car is worth. Dropping those coverages on older vehicles is a straightforward way to cut your premium. For homeowners insurance, make sure your dwelling coverage reflects the cost to rebuild your home, not the market value of your property, which includes land you don’t need to insure.
Ask About Every Available Discount
Insurers offer dozens of discounts that they don’t always apply automatically. Beyond bundling and telematics, common discounts include savings for paying your premium in full rather than monthly, going paperless, being claim-free for a set number of years, completing a defensive driving course, having certain safety features in your vehicle, or being a member of a professional or alumni association.
Some of these discounts are small, maybe 3% to 5% each, but stacking four or five of them adds up. Call your insurer or check your online account to review which discounts are already applied and which ones you might qualify for. This takes about 15 minutes and can save you a few hundred dollars per year.
Understand Why Rates Are Rising
Even with every discount applied, you may notice your premiums climbing. The average cost of a collision repair reached $4,774 recently, up from $3,225 in 2019. Heavier vehicles, including SUVs with all-wheel drive (now 60% of vehicle sales) and battery-heavy electric vehicles, cause more damage in crashes. Higher speeds on highways, a trend that accelerated during the pandemic, have made collisions more severe. Tariffs on imported auto parts have pushed repair costs even higher.
These industry-wide forces mean that getting the best rate isn’t about finding some secret trick. It’s about systematically reducing every factor within your control: your credit profile, your deductible, your coverage choices, your willingness to share driving data, and your commitment to comparing quotes before every renewal. The drivers who do all five consistently pay significantly less than those who set a policy and forget about it.