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10 Tips for Lowering Your Insurance Costs

10 Tips for Lowering Your Insurance Costs

By Jeff Youngs, August 10, 2012
If you own a car in the United States, you are required to carry an auto insurance liability policy or proof of financial responsibility (self-insurance). The rules about car insurance are different in every state, so be sure to understand what the requirements are where you live.

While regulations might be different from place to place, one thing remains the same: People want to know how to save money on car insurance. Here are 10 tips for lowering your car insurance costs:

1.    Buy a car that is inexpensive to insure. According to Insure.com, the least-expensive models to insure are pickup trucks, minivans and SUVs. The most-expensive models to insure are high-end luxury and sports cars.

2.    Eliminate unnecessary coverage. Older cars that aren't worth much do not require full coverage insurance, while newer cars still under warranty may not require roadside assistance because the service is provided by the automaker. Do not pay for coverage you do not need.

3.    Opt for a higher deductible. Monthly premiums will decrease if your auto insurance policy has a higher deductible. In the long run, the amount you will contribute toward repair or replacement should the vehicle be involved in an accident or stolen will likely be less than paying a higher monthly payment.

4.    Select the lowest personal injury protection available. If you have comprehensive medical and disability insurance, you need not pay for more than your legal state minimum requirement for personal injury protection through your car insurance company.

5.    Drive fewer miles. If you drive less, your chances for getting into an accident fall. Most insurers offer a low-mileage discount.

6.    Drive safely. Tickets and accidents cause your insurance rates to rise. A clean driving record allows you to qualify for the lowest rates.

7.    Ask about discounts. Students with good grades, older/retired drivers, safe drivers, and loyal customers often qualify for lower insurance rates. Group discounts are sometimes available to members of clubs and organizations. Also, if the car you've selected has special safety features, your insurer might offer additional discounts.

8.    Bundle insurance policies with a single company. By procuring life, home and car insurance policies through one provider, you may qualify for discounts for all three.

9.    Pay premiums in full. When you pay your insurance in monthly installments, you may be paying an additional monthly service fee for the convenience. Instead, pay your premium in full when it is due.

10.    Maintain good credit. Your credit score is one factor used by insurance companies to determine your car insurance rates. People with good credit get lower rates.

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