Easy Strategies To Save Money On Auto Insurance

As the recession wears on, people are searching for more ways to trim their expenses.  You can’t very well go without auto insurance (you’ll end up in jail), but you can take a few steps to minimize your premiums.

Comparison Shop – You may not be getting the best rate on your current automobile insurance policy.  Even without making changes to your coverage, sometimes you can save money simply by switching to another insurance provider.  Get quotes from a few different companies and compare the premiums for the same policy to see if you could save money and keep the coverage the same through another company.  Use sites such as NetQuote.com (Compare & Save on Auto Insurance!) to solicit quotes from a variety of big-name auto insurance companies all at once.  You might also consider checking out some of the online-online insurance providers like Esurance.  Since they don’t have the overhead brick-and-mortar insurance companies do, they can often afford to charge lower premiums.

Increase Deductibles – The easiest way to reduce what you pay for car insurance is to increase your deductible.  If you currently have a $250 deductible, you could save quite a bit of money by increasing it to $500 or even $1,000.  The deductible is the amount you would be required to pay before your auto insurance kicked in to help you pay for expenses related to an accident.  If you do decide to increase your deductible, make sure you have that amount of money set aside in a savings account (I use ING Direct) should you ever need it.  Keeping $1,000 in an interest-earning account will be worth more to you in the long run than paying more for car insurance premiums year after year just to keep a lower deductible.  Since accidents are relatively rare, you’ll probably come out ahead biting the bullet and paying a $1,000 deductible out of pocket every once in a while than paying a higher premium every month for decades.

Take a Close Look at Your Coverage

Most people could save a few bucks on their auto insurance just by paying attention to what exactly they’re buying.

Remove Unnecessary Coverage

Many people don’t even know what they’re covered for. Be sure to review your policy with your Insurance provider and don’t pay for items you really don’t need. For example, many of us pay extra for roadside assistance (including towing) and rental car reimbursement.  Most times, if you do the math, you’ll find you pay more for the coverage than you would just paying the expense out of pocket from your emergency fund (you do have an emergency fund, right?)

Buy All of Your Insurance From the Same Company

Almost all insurance companies offer multi-line discounts for purchasing multiple insurance products from the same company (i.e. auto insurance, homeowners insurance, etc).  There are obviously exceptions, but it is almost always cheaper to purchase car and home owner’s insurance under the same policy.  I personally use Allstate for all my insurance needs and I’ve been quite happy with them (Get $100 OFF your deductible the day you sign up with Allstate. Click here!).  Most insurers will apply the discount automatically, but make sure you ask them for their multi-policy discount just to be sure..

Know Your Credit Score

Most Insurance companies are now basing your policy pricing in part by your credit score. The higher your credit score, the lower your insurance premiums are likely to be.  If your credit is less-than-stellar, working to improve your credit will pay dividends when it comes to your auto insurance.

Determine If You Are Eligible for Group Insurance Premium Savings

Be sure to check with your employer and any organizations you belong to for group Insurance Policies. Many companies offer reduced insurance premiums through a specific Insurance provider.  These benefits will often be buried in your benefits information packet (most company benefits packages have hidden freebies).

Research Rates Before Buying a New Vehicle

Insurance premium rates can vary drastically from one vehicle to another.  All else being equal, fast cars tend to be more expensive to insure than slower family vehicles.   Be sure to contact your insurer before purchasing a new vehicle to find out what your premium will be.  Many times there will be discounts for certain safety features. You may want to ask your insurance provider what they offer discounts for and keep that in mind when searching for a new car.

Drop Coverage on Older Cars

If you are driving an older car that does not have much value, you should consider dropping collision coverage entirely.  This will cut your rate significantly.  If a car is only worth $2,000, it’s cheaper and easier to just write it off as a loss and purchase another vehicle if you’re in an accident.  The additional premiums you would pay to insure this vehicle far outweigh the benefits you’d receive if it were totaled.

Pay Your Premium All At Once

While most auto insurance companies offer a monthly payment plan, it almost always comes with tacked on convenience fees.  If at all possible, pay your six or twelve month premium upfront all at once.

Ask Your Insurance Company How You Can Get Further Discounts

One of the most obvious ways to get a discount most people never even consider is simply to ask for one.   Ask your Insurance Company straight up if there is anything else you can do that will lower your rates. Many times you can get a discount for taking a driver safety course. Other discounts can include a senior discount, safe driving record, low mileage, etc.  You’ll never know unless you ask.