Tricks to Help Lower Your Car Insurance Rate

There's more to getting a good rate than just staying accident-free...-Terence Loose

When it comes to auto insurance, we all want to get the right coverage for the lowest premium. Unfortunately, shopping for auto insurance can be easier said than done.
But don't give up on finding the best rate just yet. There are a variety of factors that could potentially save you money.
"The price you pay for your auto insurance can vary by hundreds of dollars, depending on what type of car you have and the insurance company you buy your policy from," says Loretta Worters, vice president of the Insurance Information Institute (III).
Keep reading to learn more about other tricks to help lower your rate.

Tip #1 - Shop Companies

There's a reason why Black Friday and Cyber Monday are such popular days for consumers: We all like to shop for a good deal. And while shopping for auto insurance is not as exciting as finding the right big-screen TV, it could result in a lot more savings.
But Worters advises: "Don't shop by price alone. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they provide information on consumer complaints by company."

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Tip #2 - Ask for Discounts

Instead of waiting to be offered discounts, ask about them. The fact is, your insurance carrier may not know that you just got married or you finally took that driver's education class - both of which could dig up some savings for you.
What else could help you save? Here's a partial list of possible discounts:*

• Low-Mileage Discount: applies when you drive less than 10,000 miles per year, according to III
• Good Student Discount: generally requires a B average for a full-time student
• Anti-Lock Brakes, Anti-Theft Device, or Air Bag Discount: usually must be factory installed
• Driver Education Course Discount: applies when you complete a defensive driving course
• Bundled Insurance Discount: applies when you have auto, home, or renter's insurance with the same company

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Tip #3 - Check Your Credit

A good credit score isn't just ideal for buying a car or a house - in many states, it could also lower your auto insurance rate.
"Most insurers use credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims," says Worters. "So establishing a solid credit history can cut your insurance costs."
And while some states like California, Hawaii, and Massachusetts do not allow insurance companies to use credit-based insurance scores, most states do.
What does this mean for you? Worters suggests paying your bills on time, only obtaining credit you need, and keeping your credit balances low as ways to improve your credit score.
Here are a few other tips and tricks to consider:

• Get at least three quotes and compare rates, either over the phone or online.
• Give the same information to all companies. This ensures a more accurate comparison.
• Use rating companies such as A.M. Best Company and Standard & Poor's to check out a company's financial health.

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Tip #4 - Consider Raising Your Deductible

If you file a claim, a deductible refers to the amount you pay before your insurance policy covers it. If you have a higher deductible, your insurance premium could be lower. And the potential for savings might surprise you.
"Increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more," says Worters.
But remember, before increasing your deductible payment, make sure that you have enough cash set aside to pay it in case you do have to file a claim.

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Tip #5 - Don't Over-Insure

If you lived in a 100-year-old shack, you probably wouldn't pay a lot for home insurance, right? Same goes for an aging car, yet many people neglect to drop coverage that they'll likely never use.
Specifically, Worters advises dropping collision and/or comprehensive coverage - which protects your car in the event that it's damaged - if you drive an older car.
"If your car is worth less than 10 times the premium, purchasing the coverage may not be cost-effective," she says.
But make sure to check the worth of your car before making this decision, says Worters. You could find out your car's worth through banks, auto dealers, or online with Kelley Blue Book.

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Tip #6 - Lose Your Kid

No, no, we don't mean lose little Bobby or Sally at the mall or Disneyland. We're talking about removing them from your auto insurance policy if they've grown up, gone away to college, and only visit home occasionally - i.e., they only drive your car on weekends or during holiday vacations.
How can this help your auto insurance rate?
According to the National Association of Insurance Commissioners' (NAIC) website, if your child lives away at school - at least 100 miles - and has less access to the insured vehicle, you may be able to take advantage of insurance discounts.