Ten Ways to Save Money on Your Car Insurance

Let's be real, car insurance is nothing that we get excited about paying for. Sure, it gives us some peace of mind when accidents happen and it keeps us out of jail if we get pulled over, but seeing that monthly, semi-annual, or annual deduction from our bank accounts doesn't exactly make us want to party like a rockstar. So how do we keep the overhead down every policy period? Here are ten ways to save money on boring old car insurance:

1. Take a defensive driving course. Yep. That's right. You could save anywhere between 5-15% with most insurers by taking an online or classroom defensive driving course. These are state approved courses that are geared towards improving your driving skills and keeping you up-to-date on highway laws. Courses run as little as $15 depending on your state and the reason that you're taking the course. The idea is that you want to take this course before you get into an accident and/or a court orders you to, but a defensive driving course could keep points off of your license in the event of driving violations. The course usually takes about 4 to 8 hours and is, in most cases, renewable every three years. Do a quick search to find out what your state and insurer's requirements are to receive this discount.
2. Take advantage of any student drivers on your policy with a 3.0 or higher. Your kids are already expensive enough to add onto your auto insurance policy, so you need all of the credits that you can get. Most insurers offer a "good student" discount for high school and college students who maintain a 3.0 GPA or higher, so if you have any overachievers in the household be sure to boast about them to your insurance company. If you have your student driver picking up their own tab when it comes to their car insurance, this could act as added incentive to take the money that you put aside all of those years into the 529 plan a little more seriously.
3. Enroll into your insurer's usage-based insurance program. Think you're an above average driver? Put yourself to the test. Most insurers have a driver tracking program that tracks how you're driving. They usually provide an initial discount for enrolling into the program and you could save additional money on your premium if it turns out that your driving is in fact pretty good. In these type of programs, you're tracked on things like how hard you're braking, how fast you're accelerating, what hours of the day you're driving, your mobile phone usage while driving, and your average trip milage. While some companies surcharge you for your failure to prove yourself, most just take off the initial discount on the next policy period. So in most cases, it doesn't hurt to put your safe driving skills to the test.
4. Don't drive around with state minimum limits. Wait, doesn't less coverage cost less? The answer is "yes" and "no". You'll save yourself money up front by dropping your coverages to state minimum limits, but in the long run you'll cost yourself more. People who drive with state minimum limits are more likely to get into automobile accidents, so by dropping your coverages to state minimum limits you inadvertly put yourself in that category. One of the questions that insurers ask when rating you is what were your previous coverage limits. If you were insured for state minimum limits, you will be rated as such. Do yourself a favor, pay the additional premium to make sure that you're adequately insured. You'll end up saving yourself a lot of money in the long run.
5. Bundle your policies. Keeping your insurance all in one place is a great way to save money on your premium. Most carriers offer a multi-policy discount which allows you to receive significant rate discounts for carrying more than one policy with your insurer. If you have your policies with different insurers, call your agent/broker to see what your rate would be if you combined your policies.
6. Pay your premium in full. Paying your premium in full could save you hundreds of dollars a year with most carriers. This gives insurers confidence that you won't cancel your policy in the middle of the policy period. Be sure to ask your insurer what the difference in premium would be if you paid in full versus paying monthly.
7. Exclude extra drivers in your household from operating your vehicle. Do you have someone living with you that has their own insurance? Have them listed as an excluded driver on your auto policy. This could save you money with most carriers, especially if the excluded driver has previous accidents or traffic violations. Most insurance carriers can pull a list of all of the registered drivers in your household, so if you have someone in your household that is a registered driver but isn't listed as either a driver or an excluded driver on your policy, this could increase your insurance premium and/or put you at risk to lose coverage.
8. Add accident forgiveness and/or minor violation forgiveness. I'm sure that you're aware that accidents and traffic violations can cause your premiums to increase upon renewal. A good way to prevent this from happening to you is to add an accident and minor violation forgiveness endorsement to your policy. While this does add an additional premium, it could turn out to be very useful if you ever experience an unfortunate driving event. This endorsement could be tricky, however, as some carriers don't actually forgive your accident or violation until you've maintained a clean driving record for a specific amount of years under the endorsement. Ask your insurance advisor if there are any stipulations behind the endorsement.
9. Raise your deductibles. Raising your deductibles immediately reduces the amount that you pay in premium. The more you self-insure, the less you pay in insurance. A good way to figure out how much your deductible should be is to look over your finances and ask yourself how much you can comfortably pay out of pocket before you would need your insurance to kick in. This might be a good conversation to have with your financial advisor.
10. Save a car, ride a bike. Don't want to pay for car insurance? Just ride a bike. Riding a bike eliminates that cost of car insurance altogether. It might take you just a little bit longer to get to work, but this is the easiest way to bypass the cost of car insurance. Just remember to share the road. ;)

Now that you know a few ways to save money on your car insurance, don't hesitate to take advantage of these discounts. Contact your insurance advisor to see if there are any changes that you could make to start saving today.