Reduce Your Auto Insurance Premium

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One way you can save money each month (or every six months), is to lower your auto insurance rate. It’s a good idea to shop around for auto insurance at least once a year. You can double check to make sure you are getting the best rate. Get quotes from other insurers, and then let your current insurer have a chance to match the rate.

As you shop around, consider different items that can lower your auto insurance premium. Some of the items that affect your auto insurance rate include:

Discounts

First of all, ask about different discounts. There are a number of discounts that you might be able to get from a car insurance company. Some of the common discounts available include:

• Good student discount: If you have a student driver (high school or college), and he or she maintains a good GPA, you can get a discount on their insurance coverage.
• Multi-vehicle: Insuring more than one car, or insuring a motorcycle or boat along with your car(s) can also provide you with a discount.
• Safety features: If your car includes anti-theft measures, side airbags, and other safety items, there are usually discounts available.
• Multi-coverage: Get your homeowners/renters insurance and/or your life insurance with the same company that insures your car, and you might be eligible for a discount.
• Low mileage: Some insurers will give you a discount if you drive fewer miles than the “normal” driver does. If you drive less, ask for this discount.

Credit Score

Good credit is essential if you want a lower insurance premium. Many insurers check your credit score, subscribing to the theory that if you have a good score, you must be responsible with your finances — and that trait will carry over to your driving habits. Work to improve your credit score, and you will likely see a reduction in your insurance premium. Check your credit report to find out where you stand, and determine whether improvements could be made.

Coverage and Deductible

Regularly assess your coverage to ensure that you still need it. On older cars, it might not be worth it to continue carrying collision and comprehensive coverage. Run the numbers and figure out whether or not you are paying more than the car is worth. If you can drop some coverage, consider it. (You should keep your liability coverage.)

Additionally, make sure that you are always covered. Pay your premiums on time and in full. That way, you don’t risk a lapse in coverage — something that can result in higher premiums when you renew.

Another option is to consider raising your deductible. You can increase what you’re willing to pay out of pocket and see a lower insurance premium. When you do have a higher deductible, though, you have to be prepared to pay out of pocket. An emergency fund that includes enough to cover your deductible is important in these situations. You don’t want to have to stretch to “afford” your deductible.

With a little shopping around and creativity, you can reduce your insurance costs and save money on your premiums.

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