How to Save Money on Car Insurance

Shop Around

A general rule is that there is no general rule among insurance companies when it comes to figuring out what you will pay for car insurance. Each company is different. You will not always automatically save money on car insurance if you also have your home and life policy with the same insurer. In fact, companies that specialize only in car insurance can combine risk and offer lower rates than companies that write a variety of policies. So try to take the time to make several calls and visit web sites to compare rates from a number of companies before selecting a car insurance policy. An evening's worth of research can be well worth the savings.

Choosing a Higher Deductible

You can choose a higher deductible and get a lower per-month payment. The more money you opt to pay out of pocket if you have an accident, the less risk you are to the insurance company and the lower the rate it can offer you. Keep in mind, however, that car accidents happen often and it is statistically likely that you will be in a fender bender or worse. If you do choose a high deductible, it's important to have enough money to pay it each time you incur damage to your car &mdash or someone else's.

How Low Can You Legally Go?

Another option to lower your monthly rate is to reduce the amount of comprehensive, collision and liability coverage you have on your vehicle. Be aware, though, that each state mandates a certain minimum coverage. Ask your insurance agent what the minimums are in your state, and always comply with the law. Liability insurance can be tricky, and in this case, you probably don't want to skimp. If your insurance coverage is not adequate and you or your dependent are found liable for a serious accident, you may be required to pay a lot of money out of your pocket and from your other assets.

Drive Responsibly

One of the major factors calculated into the price of car insurance is your driving record. If you've encountered your local patrolman a bit too often, moving violations, speeding tickets, at-fault collisions and driving without a license will hike up the cost of your insurance. If this is happening, it's probably time to drive more responsibly. Try to be more cautious, obey traffic signs, drive under the speed limit and don't pass on the right. If you follow common-sense rules of the road and are free of tickets for two years, call your insurance company and see if you can renegotiate a new, lower-cost policy.

Stick with the Old Standby

The market value of your car is another factor in determining the price of your insurance. Brand new, premium cars cost a lot to insure, repair or replace. Since the insurance company must pay the full amount of damages after your deductible is subtracted, they will pass that cost on to you in the form of higher monthly premiums. Car insurance is generally less expensive if you have an older model or a pre-owned car.