Five Tips for Saving Money on Auto Insurance

Share This Story
Everyone wants to save money these days, so review your auto insurance to see if it makes sense to cut costs. Read these tips, then carefully evaluate each one to determine which work for you.
 
First, a few insurance basics:
 
Drivers are required to carry liability protection to pay for damages you cause to another person or their property. But other coverages are optional, such as collision, which pays to repair or replace your car if you are in an accident, and comprehensive coverage, which reimburses you if your car is stolen. Both collision and comprehensive coverage are sold with a deductible — the amount of money you pay out-of-pocket, before your insurance kicks in.
 
5 Tips on How to Save 
  1. Consider raising your deductible (going from $250 to $1,000 could save you between 15 percent and 20 percent). Since you will need your own cash on hand if you have a car accident, this tip only works if you have enough money available to cover the deductible;
  2. If you have an older car, consider dropping optional coverages like collision and comprehensive. It's not cost effective to have too much coverage on an older car and that action could save you from 10 percent to 40 percent on your annual premium depending on the make and model of the car.
  3. Drivers with good driving records often get the best premiums, so be a safe driver.
  4. Your credit rating may affect what you pay for insurance so maintain good credit. Data shows that drivers with long, stable credit records have fewer accidents than drivers who have poor credit.
  5. Ask your insurance company about discounts. Many companies offer discounts for those who are safe drivers, good students, retired, in college, etc.
You may also save money by shopping around. Compare prices, review the financial stability of the company and find out about its history of customer service.