Auto Insurance: 8 Savings Secrets

By Insurance.com Posted : 05/26/2009

Everybody has a reason. Maybe they're telling you what you want to hear. Could be they'll get a bonus if they sell you product "A". Heck, they may simply have forgotten to mention it. Bottom line, there's something your car insurance company or agent isn't telling you that might save you money. And it could be one of these 8 things:

1. Older car? Drop collision.

Have a car that's 7 or 8 years old? Is it worth less than $2,500? That's the time to start thinking about taking the risk and dropping comp and collision premiums from your policy. The reason why? Chances are your deductible is closing in on the value of your car and any major collision will send you to the dealership, anyway.

2. Buy home and auto with different companies

With everything being bundled today – from cell phones to Internet and cable TV – you'd think that having your home and auto insurance bundled at the same company would save money. But, do your research, and you may discover that having separate policies can be well worth it. Good rates abound for both types of insurance – but it's rare to find the lowest rate for both from the same company. So, unless you buy an umbrella policy, there's no overriding reason to keep your policies together if you can save.

3. Minimum liability? Not enough.

You may tell an agent that you can only afford the minimum car insurance required by law. And some agents may be more than happy to provide you with that policy – and then get you out the door so the next paying customer can step in. What he may neglect to tell you is that in some states – particularly Ohio, Pennsylvania, South Carolina, Nevada, New Jersey and Oklahoma – state-mandated limits are ridiculously low. And there's a good chance those minimums won't even come close to covering the costs of a serious accident. Which means you could be paying WAY more than you bargained for if you're at fault.

4. Shop around for lower rates

A State Farm agent only quotes State Farm. Same for Allstate. So what are the chances their agent will tell you to shop around for the best deal? Even independent agents only represent a few auto insurers, so how do you know what's fair? Shopping for and comparing services online from companies like Insurance.com allows you to fine-tune the deductibles and coverage you want and then compare auto insurance rates side-by-side. All in one place. All at one time.

5. Go green; keep green

Even auto insurance companies are green – offering discounts that will trim a bit off your premium. Look for things like a discount for driving a hybrid, for opting for paperless statements or electronic payment plans. Even signing your policy with an e-signature can save you some pennies. Basically, the less the company has to spend on paper, the more they'll pass those savings on to you.

6. Consider paying that claim yourself

Naturally, you don't really want to hear that, but if you've backed into the garage, think twice about asking your company to repair it. Why? Besides the possibility that your rates will go up at the time of renewal, the next time you shop for new insurance, many insurance companies will use an insurance history report to see if you've made any car insurance claims, and how much money was paid. Although accidents can only affect your rates for three years, many companies will look back five or more years when deciding if they want to offer you insurance. Having more claims will affect that result.

7. Your car makes a difference. Don't buy that turbo convertible.

All vehicles are not created equal. Small or large, old or new, the type of car you drive will affect the size of the premium you pay, often based on algorithms insurance companies use to determine how expensive it might be to pay a claim. That'll affect how much your premium will be. Even more reason to shop around for the best deal.

8. Teenager turned 16? Don't add them to your policy – yet.

If your teenager has turned 16 but isn't a licensed driver, you're not required to add them to your insurance policy. You're only required to insure them once they become licensed to drive. That also means in most instances you don't have to insure them if they just have a learning permit. But check. Some policies may require it.

Looking for different information? Have questions or feedback? Please let us know.

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