How to Improve Auto Insurance Costs

Many factors can impact your auto insurance premium. Someone with good credit can save up to thirty percent on the cost of insuring a car. Even your zip code can impact your auto insurance premium. Living in a high crime area will definitely increase your auto insurance rates. It is important to know the variety of ways to save on auto insurance premiums.

• Your credit score can have a dramatic impact on your car insurance.  It has been statistically demonstrated that individuals with a low credit score have a higher incidence of automobile accidents. Check your credit score and make sure everything on your credit report is accurate. Maintaining the highest credit score possible will help reduce your automobile insurance premium. Insurance companies use an "insurance score" to rate your credit score. This score is directly related to a timely payment history and not related to the total debt an individual may show on their credit report.


• Accidents will increase your car insurance costs. Accidents that involve a citation will have a dramatic impact on increasing your insurance premium. Any accidents that involve a personal injury or damage to property will cause a large increase in your auto insurance premiums. The insurance companies check your driver’s license every time you renew your policy. Any accidents that appear with your driver’s license number will result in higher automobile insurance costs. If you are involved in a minor accident with no other vehicles, for example if you back into a pole, it is typically better to repair that car at a low cost repair facility and not report it to the insurance company.


• The type of car your drive will impact the amount you pay for your auto insurance premium. If you drive a sports car, be prepared to pay more for your auto insurance. You will pay a lot more to insure a car if it appears on the list of the most stolen cars. If your car is expensive to repair, it will also increase your insurance costs. Reduce your insurance costs by buying a sedan, and make sure it is not on the list of the cars most likely to be stolen.


• Your zip code will effect how much you pay for automobile insurance. Insurance companies keep track of stolen vehicles by zip code. If you live in a high-risk zip code, you will pay more for your insurance. If you reside in a high-risk zip code, park your vehicle in a garage or gated driveway.


• If you drive your car for recreational use only, you will save a lot of money on your car insurance. Recreational use means that you have limited use of your vehicle and do not drive to work on a daily basis. Insurance companies regard these vehicles as low-risk because of the limited amount of miles driven per year.


• It pays to shop around for car insurance. You should request at least three quotes from various companies. The more quotes you get the better the opportunity to save on auto insurance.  You will receive the lowest premium from a direct insurance agent, as the direct agent eliminates the typical insurance broker that represents multiple insurance companies.


• Ask for every available discount. Many organizations such as AAA, or ARP will offer discounts on auto insurance to their members. Some employers may have arrangements with various insurance companies to provide insurance discounts to their employees. If you insure your car and home with the same insurance company, you will get a discount on both insurance policies. If you are buying insurance for a student that has a GPA of at least 3.0 you may save up to 25 percent on your premium. There are many associations that provide discounted car insurance to their associates, for example, your alma mater, military group or professional organization may be able to offer insurance discounts. You may also receive additional discounts if you vehicle has an anti-theft device along with air bags and anti-lock brakes.


• Take a defensive driving class. This is a good way for people with multiple violations to lower their premium and remove points from their license. If you do not have any major violations, you will still be eligible for a discount with a completed course.


• College kids that live on a campus that is located 100 miles or more from the car, you can save up to 40 percent on that vehicle’s insurance.


• Loyalty discounts are available through certain companies. If you have your car insured with the same company for over a year, you can receive up to a 10 percent discount on your car insurance.


• Increasing your insurance deductible can lower your overall premium. The deductible is the amount you pay prior to the insurance company paying for a claim. Remember the insurance is there to cover the expensive repairs you may not want to handle. Increasing your deductible from a $500 deductible to a $1000 deductible can save up to 30 percent on your insurance premium.


• Drop or reduce some insurance coverage. If your vehicle is more than ten years old, you may want to reduce or eliminate your collision coverage. If you car is worth less than ten times the amount to cover the insurance, you may want to drop both the comprehensive and the collision coverage. You should only need liability insurance on a vehicle that is ten plus years old provided there are no liens, (loans) against the vehicle. Eliminating the comprehensive and collision insurance on a vehicle can save up to 40 percent on your auto insurance. If your vehicle is leased or financed, check with the financial institution before changing your coverage. Most banks require a minimum amount of insurance on the vehicle.