How To Reduce Your Insurance Premium

  1. Shop around. Insurance is a competitive business. It's not especially rare to find a company that will halve your current premium yet provide the same coverage. For starters, look at the deals offered in the OnMoney.com Auto Insurance Center.
  2. Raise your deductible. The deductible is what you pay before the insurance kicks in. If your car gets a $2,000 dent and your deductible is $500, you pay $500; your insurer pays the rest. By accepting a higher deductible (say, $1,000) you can almost always reduce your annual premium.
  3. Slow down. A clean driving record for three years merits a nice discount. Also, if you drive more carefully, you have a better chance of living long enough to pay another premium.
  4. Reduce the scope of your coverage. Every state has minimum insurance requirements, but people often sign up for more - usually for darned good reasons. However, as your life changes - a teenager metamorphoses into a college graduate - your needs change too.
  5. Drop towing, car rental fees. Special coverage for expenses indirectly associated with an accident can raise your premium.
  6. Reduce the amount of your coverage: You want enough coverage to protect against disaster, but you don't want to be over-insured. It's usually wise to keep up your liability coverage, but cut back on your collision and comprehensive coverage once your car passes its 3rd birthday.
  7. Take a train. Some insurers offer a discount if you drive less than 7,500 miles each year.
  8. Drive for pleasure only. You may get a tax break for business use of your car, but higher insurance costs for business use can offset some of the tax benefit.
  9. Forget the Lexus: The more expensive your car, the more you pay to insure it. This doesn't mean you have to drive a Yugo, but automotive modesty reduces insurance costs.
  10. Try country living. As a rule, you pay more to insure a car in a big city. If you move to the suburbs, ask for a break on your car insurance.
  11. Get anti-theft devices. Most insurers offer a discount on cars with anti-theft hardware, such as an alarm system.
  12. Take the safety options. Seat belts, air bags and anti-lock braking systems are known to reduce injuries, so many insurers gladly offer a discount for cars with such devices.
  13. Insure everything with one company. You may get discounts on all your insurance policies if you buy all of them from one company. Even if the firm doesn't advertise such a deal, ask for it. Many cave in on this point.