Reducing your Auto Insurance Premium

Saving money on automobile insurance is not difficult. Most carriers allow for rate reductions under a variety of circumstances.

Step One: LOOK FOR DISCOUNTS ON YOUR PRESENT PLAN. Some common ones are for driver education, good grades, driving under a certain amount of mileage per year, and the use of anti-theft devices.

Step Two: SCRUTINIZE YOUR POLICY. Which discounts are already included as a part of your present contract? What are your limits and deductibles?

CAUTION: It is often not prudent to get rid of needed insurance simply to obtain the lowest rate possible. For example, collision is something that usually is associated with a $500 deductible. If you are a careful driver, and have some money in the bank, you might want to raise that to $1,000 to save on monthly premiums. However, if paying $1,000 for a repair would be cost prohibitive, stick with the lower deductible.

Step Three: GET RID OF UNNECESSARY COVERAGE. Everything you are paying for is itemized on your policy form. If you go through the document line by line, you will be able to find ways to decrease your auto insurance bill. Another important factor is to see where coverage is duplicated or simply unnecessary. Some insurance agents automatically include extras like rental reimbursement coverage and towing. Do you really need these items?

TIP: If you already have AAA, you may not want a towing package. Also, if you have several vehicles, you may not want to pay an additional sum for the rental reimbursement option. While being able to secure a free rental for a month is nice, if you have access to other vehicles, it is unnecessary. Needs vary. If your family uses all of the automobiles daily, the price of the coverage may be worthwhile.

CAUTION: Some big ticket items like liability coverages can be reduced and significantly lower your premium, but this is risky business, particularly if you have assets. Still, it pays to consider every line item and do appropriate research. Mull over each possibility and make the decisions. Don’t let the agent decide for you.

Step Four: GET THE LOWEST POSSIBLE PRICE ON YOUR INSURANCE AND THEN COMPARISON SHOP. Call your current carrier now and relay all of your concerns. Ask specifically how you can lower your premiums based on your unique circumstances. After you obtain the lowest price on your auto insurance from your current carrier, shop around. Call several automobile insurance companies or agents that do business in your state. Look through the phone book or ask your friends for recommendations.

TIP: All carriers have web presence and doing this research online is easy and convenient. For example, go to This site provides links to obtain quotes from carriers such as Progressive, esurance, and GEICO, along with services that make use of multiple carriers like ComparisonMarket and NetQuote.

Step Five: EVALUATE THE RESULTS. After you select a few potential companies you want to do business with, get price quotes and compare. It may take some time to provide all essential information to each company, but it is worth the time as you may be able to significantly lower your auto insurance rates.

Step Six: MAKE A DECISION. Now sit down with your notes. Take all of the information you gathered into account. Compare premiums. It might help to create a chart on a columnar pad, noting the possible premiums and discounts available.

TIP: Some carriers offer loyalty discounts and with that in mind, it may not pay to switch.

Now, after doing your research, choose a plan that fits your needs and is well priced. You are not done. This is an ongoing process. By examining your policy at each renewal, and making changes appropriately, you can save a lot of money on this necessary expense.