Auto Insurance Tips That Work and Could Save You Money.

For lots of Americans auto insurance is a very expensive purchase. To make an informed decision you should learn as much as you can about the underwriting factors that affect the cost, the different amounts of coverage available, the requirements in your state, and about what insurance companies have the best rate for you. A survey conducted by the National Association of Insurance Commissioners found that the average annual premium for each car was $855 (that includes liability, collision, and comprehensive coverage’s). Understanding auto insurance is the first step towards ensuring that you have the right coverage at the best price.
Reducing the Cost of Your Auto Insurance

You can often significantly reduce your auto insurance coverage costs by taking advantage of discounts offered by insurers. Discounts are available to drivers who seem like a better risks to insurance companies. Look for the following types of discounts when pricing your insurance needs:

• Shop Around. The difference in price between various companies can be significant. • Buy a lower profile car. Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals. • Consider Third Party Only coverage. A third party only insurance policy is the minimum amount of coverage legally required - it is also the cheapest.

• Increase your deductible. Raising the deductible on your auto insurance can sometimes be a good way to cut the cost of the policy. Sometimes you can reduce your annual premium by 10 percent or more. • Insure. Put all your cars and maybe even your home with same company to get discounts. • School. If in school, get good grades. Take a driver's education course. • Buy a car with safety equipment. Air bags, automatic seat belts, and antilock brakes.

• Keep your mileage low. The less you drive, the less risk you have of being in an accident, the lower your premiums. • Drive safely. A good driving record is your most valuable cost cutting opportunity. • Four door vehicles. Cost less to insure than two door vehicles. Tow door vehicles are considered sports cars. • Try and stay claim free. The biggest factor affecting the cost of your car insurance premium is how many No Claims Bonus Years you have. Full No Claims Bonus is generally considered by most companies to be five years or more, this can give you huge discounts.

• Be realistic about the value of your car. Most of us have an inflated view as to what our car is worth. When asked the value of your vehicle during the insurance quotation process, people will often state an amount that is unrealistic and above the real value of the car. • Unnecessary named drivers. Additional drivers on your policy usually mean a higher premium. A lot of people add a number of extra drivers on the policy just in case that person needs to drive the car. However, having all these drivers will push up the cost. • Car security. Theft of and from your vehicle are important considerations when insurance companies calculate your price. Most companies will give you a discount for having better security of your vehicle.

• Take an advanced driving test. Although not compulsory, taking an advanced driving test can not only improve your driving skills but also help to lower your car insurance premium. • Pay your premium for the year. If at all possible, by paying for your car insurance all in one go, you can avoid paying additional interest charges that would be added on if you opted to pay by installments. • Keep your car in the garage. Keep your car in a garage. Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction. • Endorsement fees? These fees can range from $20 to $30 just for making any type of change to your existing policy, even an address change.

• Maintain a good credit rating. By keeping a good credit history you may avoid any additional premium that companies add to your price for having a bad credit score. • Buy on the web. Many insurance providers now offer some good discounts for buying the policy over the internet.

Other Considerations

When purchasing auto insurance or in reviewing your existing policies, there are some general considerations you will want to be aware of. Make sure the policy provides as much protection as is necessary. Know the maximum dollar amount the insurance company will pay. Be aware of your deductible amount, which is the amount you must pay before your insurance company will pay anything. Know what your responsibilities are if an accident occurs.