Auto Insurance Savings Tips

By Ryan Hurlbert on April 7th, 2010

Until a claim is filed, many view their auto insurance as an intangible promise. Here are a few ways to pay less for that promise--without compromising your coverage or protection.

Shop Around

Shop around for the lowest auto insurance premiums. What used to take hours with the Yellow Pages and a notepad can be accomplished in minutes with the Internet.

Raise Your Deductibles

A deductible is your share of a comprehensive or collision claim, and by raising your deductible you can reduce your premium. But you should weigh the rate savings against the additional risk. The savings to the insurer, and thus lower premium, doesn't come solely from the extra few hundred dollars you pay for a claim. The savings also come from the smaller claims you don't make. When increasing a deductible, you should decide if the extra savings is worth paying for minor damages yourself.

Ask For Discounts

Make sure you ask for every discount possible when shopping for car insurance. Before comparing rates, know the safety and security features of your car. You shouldn't count on the agent to offer discounts--you should ask for them. Here are few common discounts:

  • Airbags and passive restraints
  • Antilock Braking System (ABS)
  • Anti-theft system or stolen vehicle tracking system like LoJack or OnStar
  • College graduate
  • Non-smoker
  • Low-mileage and/or pleasure-use vehicle
  • Affinity discounts, such as car owner clubs, alumni associations, or service organizations
  • Defensive driving classes
  • Senior discounts
  • New car
  • Good student
  • Good credit

There are others discounts available, so ask if the insurance company offers any discounts you didn't request. Make a note of any new discounts offered and include them on your list for subsequent quote requests.

Your Car Choice Makes a Difference

Comprehensive and collision premiums are partly based on how difficult it is to repair a damaged vehicle, and the cost of replace it if your car is totalled. If a vehicle's design allows for easy part removal and replacement, and vital systems are well protected to avoid costly damage, it could be cheaper to insure. The safety systems in a car, which can reduce injuries, can lead to lower premiums for medical payments. Picking the right car can save you cash on insurance premiums.

How can you tell if the ride of your dreams is difficult to insure? The Highway Loss Data Institute, a division of the Insurance Institute for Highway Safety, tracks claim losses by year, make, and model, and posts this data in an easy-to-use Web site.

Damages are compared by make across six categories:

  1. Collision coverage
  2. Property damage liability coverage
  3. Comprehensive coverage
  4. Personal injury protection coverage
  5. Medical payment coverage
  6. Bodily injury coverage

Typically, fast, expensive theft-targets cost more to insure than more utilitarian choices, like minivans. But there is a lot of variability among sports cars, too. Insurance companies each choose how they'll rate particular vehicles, so shop around for the best rates.

Clean Driving Records Can Save Money

Keeping a clean driving record can save you money on your auto insurance. Claims, tickets, and accidents can lead to surcharges of 30 percent or more. Your insurer may cancel or non-renew your policy, or switch you to their high-risk company with higher premiums to match. Tickets and claims also make it difficult to switch companies because auto insurers price higher-risk drivers with higher premiums. Getting auto insurance after being canceled is expensive, and it can take years to qualify for lower premiums.

Many auto insurance cost factors are within your control, so minimize your auto insurance expenses without compromising coverage by shopping around, asking for discounts, and maintaining a clean driving record.

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