10 Ways to Save Money on Car Insurance

Most of us at some point in our lives need insurance for protection. And protecting ourselves does not have to cost an arm and a leg. Purchasing the least amount of insurance needed with the highest deductible that you are able to afford should the need arise will definitely save a lot of money. However, the more a person has—the more a person can stand to lose. Individuals must decide for themselves on how much or how little insurance to purchase in order to protect themselves.

1. Do Your Research

Shop around and obtain at least four quotes before making a firm decision on where to purchase your policy. Log on to insurance aggregate websites like Insurance.com, Insure.com or eSurance.com and research various companies and rates online. Don't forget to call companies in and around the city where you live. Policies may vary by a few hundred dollars from different insurance companies for the exact same coverage.

Buying a policy online from a reputable insurance company may offer a significantly lower premium since it cuts out commissions paid to an insurance agent.

2. Review Insurance Needs Annually

Take the time to review insurance policies at least once a year (preferably every time you receive a premium), to make sure you have only the amount of coverage needed. Some insurance companies add unnecessary coverage periodically to policies without the customer's awareness.

3. Membership and Retirement Discounts

Ask about membership discounts if you are a member of an organization, military group, league, or association like the American Association for Retired Persons (AARP). Also, if you work for a large company, you may be eligible for a discount.

Do not forget to let your insurance company know when you retire. You may be able to get a discount since you will not be driving as often.

4. Defensive Driving

By taking a defensive driving class, you become less of a risk for the insurance company. Many insurers will give discounts to individuals that have successfully completed defensive driving courses which can save as much as 10% on premiums.

5. Safety and Anti-Theft Devices

Vehicles safety devices like airbags and anti-locking breaking systems offer lower premiums and installing anti-theft devices like alarms will also lower insurance premiums.

6. Lower Coverage on Older Vehicles

There comes a time when having full coverage on older vehicles is no longer worth it. Check KellyBlueBook.com to learn the value of your vehicle. Having collision and comprehensive may just be a complete waste of money if the value is very low.

7. Avoid Paying Installment Fees

Paying six-months or a year in full rather than financing the premiums will save on service charges. If making a payment once a month, extra charges and administrative fees are tacked on to the installment payment.

8. Raise Deductibles

Raising the deductible that you would have to pay can offer huge savings on premiums. However, make sure you have enough money to cover the deductible should the situation arise.

9. Maintain Good Credit

Insurance companies think that responsible people pay their bills on time and will offer lower premiums to those individuals. Studies also indicate that there is a direct correlation between your credit score and the possibility of submitting an insurance claim. This information is used to calculate your insurance-risk score and is one of the criteria for setting the premiums.

10. Clean Driving Records

Sustaining a clean driving record means that you are a lower risk to the insurance company. After your first at-fault accident, the insurance industry standard is to increase the premium by 40%.

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