10 Ways to Lower Your Auto Insurance Bills

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Hands down, the best way to save money on your auto insurance premium is to be a safe driver. The fewer accidents and traffic violations you have, the more insurers you'll have bidding for your business and the lower their rate quotes will be. However, not all of us have a perfect record, so we need to look at additional ways to save money. Here are a few:

1. Take a driver safety course. If you've been ticketed for an accident or some other violation, the state will remove it from your driving record when you take a driver safety course. The required course length, content and limitations vary from state to state, but if you want to keep your driving record as clean as possible, this is a relatively easy route to take. In addition, almost all insurance companies will lower your premium just for taking the course. So even if you haven't been ticketed, you can still take a driver safety course to save money.

2. Increase your deductible. Ask your insurer for premium quotes using different deductible levels to see how much you could save by covering a greater portion of an accident cost out of your own pocket. It may be worth it to go with a higher deductible, particularly if you're a safe driver who is less likely to be in an accident or if you've got the financial capacity to pay a higher deductible in the event of an accident.

3. Forgo comprehensive and/or collision coverage. If the value of your vehicle is not that high, you might want to consider going without comprehensive and/or collision coverage. For instance, if your car is more than 10 years old or if it already has significant body damage, the cost of these coverages over a year or two could exceed the value of the vehicle entirely.

4. Compare prices regularly. Shop around by getting premium quotes from other insurers every year or two. You don't necessarily have to change companies, but this is generally a worthwhile exercise. It's relatively easy to do, and you could find another insurer that will save you a significant amount of money on your auto insurance.

5. Use the same company for homeowners and auto insurance. Almost all insurers will give you a discount on your premium if you purchase insurance for both your home and your car from them. Be careful though. Sometimes, even with this discount, you could end up paying more than you would by shopping for the least-expensive coverage from two separate, unrelated insurers.

6. Take advantage of group discounts. If you are a member of a national group such as the AAA auto club or AARP, ask your agent if there are any special discounts for your group. And if you or your parents were in the military, be sure to get a rate quote from USAA, a company that specifically caters to military personnel. As with other discounts, you'll want to make sure that the discounted policy is indeed less expensive than your other options. In other words, don't buy it just because the insurer is giving a discount to your group.

7. Choose a vehicle that is less expensive to insure. When you're in the process of buying a new car, that is the perfect time to factor insurance costs into your selection decision. Ask your insurer (as well as other insurers) for premium quotes on a couple of different vehicles that you are considering so you can see whether one would cost you more from an insurance standpoint. Also, make sure your prospective purchase isn't high on the stolen-vehicle list, since insurers rely on this list in setting their premium rates.

8. Use your clean credit report to your advantage. Depending upon the laws in your state, insurance companies can use your credit history to grant or deny coverage or use as a factor in setting your premium rate. So be sure to get a copy of your credit report and make sure any erroneous information is removed (this is a good idea even when you're not shopping for auto insurance). You'll usually be given the option to grant the insurance company access to your credit report. So, if you have decent credit, let them see it and it could save you some money.

9. Ask about discounts for young drivers. If you have a young driver in your house, be sure to ask if your insurer gives any discounts for taking a drivers' education course or getting good grades. Such discounts are becoming more popular these days as companies attempt to better assess youngsters' risk of an accident.

10. Pay your premium in advance. If you can afford it, pay your full annual or semiannual policy premium up front. Some companies actually give you a discount for doing so, while others will charge an extra fee ($3 to $5 each month) if you elect to pay your premiums monthly.

Of course, none of this matters if the company you insure your car with has financial problems and can't pay your claims. So once you narrow down your choices to a few companies, you should always check the companies' financial strength. The table below lists auto insurers with the highest TheStreet.com financial strength ratings.

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