Auto Insurance Savings: Tips for Lowering Your Premium

It's not exactly cheap to drive and maintain a car these days. As gas prices waver up and down and salaries fail to keep pace with inflation, it seems we're all looking for ways to cut costs.

For those of us who drive, auto insurance is a necessary requirement enforced by law. Though we hate paying what we sometimes feel are outrageous premiums, the financial protection we gain from those policies is a trade-off we just can't live without.

Just ask anyone who's been involved in an accident lately.

But there is good news. As this mobile society struggles to keep up with increasing costs, auto insurance premiums have finally begun a downward trend.

According to one reliable source, the average auto insurance premium fell almost 2 percent last year, to an average of just over $2,300 per household.

That may not sound like much, but it translates to an average savings of $60 a year.

If you weren't one of the lucky ones who got a pleasant surprise when your auto insurance policy renewed this year, don't despair. You can still save money on your premium by following a few simple steps:

1. Comparison Shop. If you have a good driving record and/or buy a safer car, your premium should go down. Plus, with some companies now charging lower rates, increased competition means better auto insurance rates for you! Take advantage of online marketing services like InsureMe.com to find the best auto insurance rates from competing insurers.
2. Find out what your insurance will cost before you buy that new car. Auto insurance companies typically charge more for cars that are expensive to repair or don't fare well in accidents. So before you drive off that lot, make sure your new car is considered safe, and relatively cheap and easy to repair by your insurer. This will help minimize risk...for both of you!
3. Ask your insurer for discounts. These cost-savers can lower your insurance premiums more than you might think:

• Combining two or more cars on one auto insurance policy
• Buying a car with airbags or other safety equipment
• Installing anti-theft devices in your vehicle
• Completing a driver's education course
• Insuring your home and auto with the same insurer
• Applying for a mature driver discount (for those between 50 and 65)
• Getting good grades (for students under 25)

Take the highest deductible you can afford. Your deductible is the amount you pay out-of-pocket, in case of a claim, before your insurance company starts paying its share. The higher your deductible, the lower your premium--it's as simple as that. Just be sure you're able to absorb a larger portion of your loss in case of an accident.

Improve your driving record. The more tickets and accidents you have, the more your auto insurance costs. So drive cautiously, improve your motor vehicle record, and inform your auto insurance company of the change. They'll reclassify you as a safer driver, and lower your auto insurance rates in the process!

Consider dropping comprehensive and/or collision coverage if you drive an older car. Physical damage coverages like these reimburse you for damages to your own car. But if the vehicle you drive is several years old--or worth less than $1,000--it may not be worth much anyway. Dropping such unnecessary coverage can really save you money.

Review your policy regularly, and keep your coverage updated. Your auto insurance rates may fluctuate due to:

• Adding or removing a driver from your auto insurance policy
• Replacing an older vehicle with a newer one
• Adding or removing a vehicle from your policy
• Increasing or decreasing the number of miles you drive annually

Talk to your insurer if you encounter any of these situations. Under the right circumstances, you'll reduce the impact on your wallet--and walk away a few dollars richer!

If you're looking for ways to counter prices at the pumps--and everywhere else, for that matter--take these tips to heart.