How to Save Money on Auto Insurance

By Compuquotes Team on August 24th, 2009
Auto Insurance

Saving money on auto insurance is not difficult, if you are willing to do some research, read your policy and put some extra money in your savings account.

1. Raise your deductible.
By raising your deductible, or the amount of money that you pay in the event of an accident, you will lower your premium. Raising your deductible from $250 to $1000 can lower your premium by several hundred dollars a year. Although you will save money, it is important to build up your savings account so that you have the money to cover your deductible if you are involved in an accident.

2. Maintain a clean driving and credit record.
A driving record that is free of speeding tickets and accidents where you were at fault will lower the perceived risk to insurers. Another way to lower this perceived risk is to have a good to excellent credit record. Because insurers have realized that people with good credit are also good risks, credit history is used to factor in the cost of your policy.

3. Keep your policies with as the same company if possible.
Letting one insurance company hold both your homeowners and auto insurance coverage qualifies you for a multi-policy discount.

4. If one or more of your cars are older or high mileage, consider dropping full coverage and going with comprehensive or collision only coverage.
Because the amount the insurance will pay out in these claims is often less than what you would spend replacing the car, dropping full coverage often makes sense with older vehicles. Again, set some of the money that you are saving back, so that if your vehicle is damaged, you have cash on hand for repairs.

5. Reduce the number of miles that you drive.
High mileage driving increases your auto insurance rates. Carpool, switch to a four day work week or consider working from home some days if possible to reduce the amount of miles you drive each week.

6. Purchase a car that is not popular with thieves or expensive to repair, as both of these increase your premium.
Online statistics are available that allow you to look up what vehicles are most expensive to insure.

7. If you have good health insurance, you can save money by carrying the minimum personal injury coverage.
Most states have a minimum amount of personal injury coverage that they require, but if you have good medical coverage, there is no reason to go above the minimum.

8. Shop around before committing to one company.
Although you want to save money, question a rate that seems too low, remember if something sounds to good to be true, it probably is. Your state insurance department governs all insurers licensed in your state, and can determine if a company is legitimate.

By following these simple steps, you can reduce your auto insurance costs while still having adequate coverage. Many people sign up for policies without reading them carefully, and their policy may contain coverage that they do not need or want. It is important to balance your desire for a low premium and your need to maintain adequate coverage.

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