Best Ways to Lower Your Auto Insurance Premium

There are a number of ways that you as a consumer can lower your auto insurance premium. The easiest way is to change your coverages. If you raise your deductible or drop a type of coverage, your premium will go down. Just make sure to compare your savings and comfort level with the deductible that you choose because you will be liable for that deductible amount before the insurance company will step in and pay for repairs to your vehicle.

Decrease the number of miles driven in a given year. The average miles driven per driver in a year is about 12,000, as a result, drivers who drive more than that amount are considered a higher risk and will usually have slightly higher premiums. Those who drive less will have the opposite effect since the exposure to a potential accident or loss is reduced. As a result, if you drive less than 12,000 miles per year, inform your insurance company. Just keep in mind that if you do end up driving more, you will want to inform your insurance company so that they can adjust the mileage listed on your policy accordingly and you can avoid a potential problem if an accident or claim does occur.

Exclude high risk drivers off of your policy. When a policy is opened, it typically will cover those listed on the policy as reported by you. Insurance companies will ask that all those who are close to driving age be listed on the policy. When each person is given, they will each be listed and covered on our policy unless you specifically exclude them. This can cause a problem because high risk drivers such as a newly licensed person will usually increase your rates since they are deemed to have reasonable access to your vehicle(s) and keys. To avoid the cost of doing so, you would want to exclude them from your policy. This means that they would not be covered under your auto insurance if they were to operate your insured motor vehicle.

Drive a car that costs less to repair. One of the factors that insurance companies use to determine the cost of your collision and comprehensive coverage is the cost of repairs. Luxury cars cost more to repair for the same parts than a typical mainstream car. As a result, if you would like a lower premium, drive a car that costs less to fix if it is in an accident. An insurance company will offer collision or comprehensive coverage in relation to the cost they will bear in order to repair your vehicle if an accident or loss occurs. Hence a car that costs less to repair will also cost you less to insure.

Add multiple policies to a single carrier. Most insurance carriers readily will give a multi-policy discount or multi-lines discount to policy holders who have several different types of insurance with them. For example, a person or family who has an auto policy along with a homeowners or renters insurance policy will typically save around 10-20% per policy. It typically takes an insurance company 3 years to make any money on a policy therefore insurance companies want to keep lines of business. As a result, they will make policies more attractive by offering various discounts. Some other examples of policies that can possibly be used to obtain additional discounts include business owners, umbrella, general liability, inland marine, or a life insurance policy to name a few.

Keep a clean driving record. One of the largest and most easily attained discounts is the good driver discount. It is simply obtained by being a good driver, avoiding points on your record and avoiding accidents.  The requirements vary by state as do the discounts, but the average savings is roughly 20%.

Car alarm or theft recovery system.  Having a theft recovery or alarm system on your vehicle can save you a little bit of money. Depending on the insurance company, it can save you up to 10% depending on what type of device it is. A theft recovery system such as LoJack assists law enforcement recovery efforts if your vehicle is stolen. Consequently insurance companies are willing to offer discounts off of your premium because the service assists in mitigating potential costs.

Good Student Discount. Students under the age of 25 can receive a good student discount on their auto insurance if they have good grades (typically a B average or better). This discount is usually up to 20% and is applied when proof of their grades are submitted to the insurance company.

Stay with your insurance company longer. Many insurance companies offer a loyalty or persistency discount that is rarely ever mentioned. This discount is applied to a policy after it has been in force for sometime, typically 3 or more years without a lapse in coverage. Not all insurance carriers offer this, and the time frame varies for those that do, but it usually amounts to 1-10% depending on how long you have been with the insurance company. The longer the policy has been in force, the larger the discount can be.