8 Ways to Save on Car Insurance

By Michael Broach

Now that the days of cheap gas are over, people are constantly looking for ways to save a few bucks on their car. Most people will look for ways to make their car more fuel efficient, but another way to save is to lower your insurance premiums.

We usually don’t think about how much we spend on car insurance -- until we get the bill. Then we complain about the amount as we write the check, but we forget about it again as soon as we mail the payment. Here are eight tips to help you lower your rates and save some money (so you can buy more gas). Most of these tips will help lower your premiums without much effort on your part; usually a simple phone call is all that is required.

1. Shop around

Get at least three price quotes from different insurance companies in your area. Also, explore the different types of insurance companies that are out there. Some insurers sell through their own agents, while others sell via the Internet without an agent as the middleman. Don’t worry if your driving record isn’t crystal clear -- you should still shop around from company to company as you might find cheaper insurance. Your savings could be hundreds of dollars depending on the level of competition in your area.

2. Get a higher deductible

Asking your insurance company to raise your current deductible can save you big bucks. A small word of advice before taking that step: Be sure to keep at least the amount of the deductible on hand, because you’ll be responsible to cover that amount if something happens to your car. In other words, when you raise the deductible you are telling the insurance company that you will pay more out of your pocket if you get into an accident. Going from $200 to $500 could save you up to 30%. Go all the way from $200 to $1,000 and you could be coming close to cutting your rate in half.

3. Reduce the coverage

Lower coverage means you’ll receive less money from your insurance company in case of an accident. If you have an older car or if you’ve paid off your car, this option could be particularly appealing. If you opt to drop the collision and comprehensive coverage and stick with the liability option, you’re premium will be reduced because you’ll only be insured for damage to other people’s property. If you decide to reduce your coverage, do some investigating and find out what your state's laws on minimum car insurance are. Savings can vary depending on what your current coverage consists of, but in some cases it could drop a signification percentage off of what you pay.

4. Use the same insurer for multiple policies

Many companies will provide a discount on car insurance if you also allow them to cover your house as well. In some cases, this can amount to a 10% savings. If you have two cars covered on the same policy, you may also be eligible for a discount. Be sure to do the math and make the best decision for both your home and auto insurance.

5. Low mileage discounts

If you typically put very few miles on your car in a given year, some companies will give you a break on your insurance. The actual number of miles and the size of the discount will vary from one insurance company to the next, so be sure to ask your insurance company for details.

6. Group insurance

Any group or club you are a member of might offer discounts on car insurance. Verify with your employer, alumni group or professional society to see if they have such a benefit. Depending on the size and location of your group or club, this can be a substantial discount.

7. Safety-equipped car

Make sure you are getting credit for having a safety-equipped car. Contact your insurance company and make them aware that your car has such things as daytime running lights, anti-lock brakes, an anti-theft system, and air bags. Anything that makes your car safer may lower your rates by 7% to 10%. The amount of money you will save depends on the insurance company and the equipment in your car.

8. Long-time customer

Some companies will reward their customer with a loyalty discount. If you have been with the same insurance company for five years or more, call and find out if you might qualify for a loyalty discount. Not all insurance companies will offer this rebate, but those who do could give you up 10% or 15% break on your insurance rate. If you’re shopping around for insurance, be sure to ask about these loyalty discounts.

After reading through this list I hope you have found at least one thing that will help cut the cost of your insurance. Some suggestions may save you more money than others, but remember that every penny helps. And although this list provides some simple ways to save money on your insurance, there are more drastic means to cut your rates. Contact your insurance company to learn more. Good luck and safe driving.

Michael Broach is a staff writer for Accent Accounting, an accounting firm providing services for small businesses and individuals in the Huntsville, Alabama area.