Cutting the cost of your car insurance

wrecked carLooking to save a buck or two? While skipping lattes and brown-bagging lunch can shave a few cents, experts suggest taking a look at how much you're shelling out for auto insurance.

There are many easy ways drivers can save money on their auto insurance, and most of them take just a little bit of time and a phone call or two. To cut your auto insurance costs and put some much needed money back in your pocket, implement these tips.

Bundle up
Neal Ringquist, president and COO of Advisor Software, Inc., suggests putting your homeowners insurance and car insurance out for bid, bundling the two: "Solicit bids online first, then talk to your local agents/reps with those bids." And make sure you're fully aware of each provider's policy discounts (driving record, type of roof, etc.).

Check back in
"Too many people set their auto insurance policies and forget about them," says Eric Poe, COO of CURE Auto Insurance. "This results in extraneous costs that drivers continue to pay year after year, all because they haven't taken the time to review their current polices and reevaluate their insurance needs. It's the equivalent of throwing money out the window."

Shop around
Even if you've never gotten a ticket or been in an accident, many insurance companies charge you more if you don't have a college degree, don't work in a "white collar," high paying job, have a poor credit score or don't own your own home. Also, if you use an agent or broker, keep in mind that they only represent a certain number of insurance companies and don't have the ability to effectively shop around to compare rates for you.

Review your current policy
If you don't have assets to protect, you may not have a need to purchase large limits for liability. For example, the state of New Jersey allows every driver to purchase a Basic Policy that allows you to buy a policy with no liability insurance coverage.

Skip the kids
"Never add your teenage children as drivers/users on the family car insurance policy," says John O'Brien, an attorney in Chicago who is familiar with the policies of several insurance carriers. "As a parent, I've never added my kids to the policies. Not surprisingly, my kids had a couple accidents, and the claims were never denied/questioned on the basis that I hadn't added them to the policy. The claims did result in the normal 'surcharge' that would have applied if I had been driving, but we were never required to add the children to the policy or pay the huge premium that would have resulted if we did."

O'Brien says an overwhelming majority of auto policies (including those issued by all the major companies you've heard of) cover the car, regardless of who is driving it, as long as they have the owners' (parents') permission. "Many states, including Illinois, require the policy 'follow' the car, meaning the insurance company has no choice in the matter," he says. However, this only applies to the family car(s) owned by the parents. "If you buy your child a car, and the title is in the child's name, that's a different matter," says O'Brien.

Get physical
Poe suggests dropping the physical damage coverage for your car. "If you drive a car that is seven years old or older, you can drop your collision and/or comprehensive coverage, since the vehicle's market value has significantly decreased, and any claims that you make may not exceed the deductible amount."

Assume more risk
Ask your agent to run your numbers based on several deductibles. "Increasing your deductible from $500 to $1,000 could decrease your premium by up to 30%," says Poe. Remember, collision deductibles generally only cause you to pay if the accident is your fault.

Look for unique discounts
You might expect one for being a safe driver or for having an auto alarm. But Poe says there are plenty of off-the-beaten path discounts you should ask your agent about. "Discounts for a secure garage and off-street parking are examples of the unique benefits offered," he says. The discounts can be significant especially in urban areas where you pay much more for insurance due to the location alone.

Gina Roberts-Grey is a freelance journalist specializing in health, celebrity and consumer issues.
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