There are several simple steps you can take to reduce your auto insurance premium and save money every year.
1. Raise your deductibles. Many people have $100 or $250 deductibles on their auto insurance policies. While it is nice to not have to come out of pocket with that much money if you are involved in a car accident, your rates will drop substantially if you simply increase your deductible to $500 or $1,000. Of course, if your car is financed, check your loan before raising your deductible too much.
2. Check with the Department of Insurance. Many state’s Department of Insurance have a survey done once per year that provides you with comparisons. While these may not be a perfect fit for your situation, you can find a situation that is close. For example, the California Department of Insurance has a survey available at www.insurance.ca.gov.
3. Take driver’s education or safety courses. Many insurance companies offer a discount if you have completed a driver’s education or driver’s safety course. Some of these courses are even available online. A class for a few hours can reduce your premium significantly.
4. Bundle your insurance. By placing your auto insurance with the same company that writes your homeowners or renters insurance, you can obtain a discount of 10% or more. Your insurance agent should be able to tell you about this discount.
5. Track your mileage. Insurance rates are based on how much driving you do. If you drive your car less than 10,000 miles per year and you can document it, you can save money on your premium. Oil change receipts or other documents will help you document this.
6. Shop around. You can use the internet as a starting point, but make sure you do not buy unless you know exactly what you are buying. A good insurance broker will sit down with you and talk to you about options as well. A broker can shop many insurance companies for you and does the leg work. Take advantage of this.
7. Drop your collision and comprehensive coverage. The rule of thumb is that once your car is worth less than $2,500, you can drop your comprehensive and collision coverage since the premium over a few years will be more than the value of the car. Of course, only do this if you can afford to replace your car.
8. Buy your kid a car! This may be the only place you get this advice. However, if your child is driving age and does not have his own car, the insurance company will rate him on the most expensive car you own. By letting him have a “beater” you will save yourself a lot of money in your premium.
The law requires that you have auto insurance. However, it does not require that you spend too much on your auto insurance. These simple steps will help you save money on your auto insurance premium.