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Double-check your car insurance savings



Insurance paperworkBuying even the minimum levels of liability insurance can be expensive for good drivers.

Research from the Consumer Federation of America (CFA) found that more than half of motorists in its sample -- drivers without moving violations or accidents who live in moderate-income areas -- were quoted rates of more than $1,000 a year for basic coverage. For 32 percent, the quotes averaged more than $1,500.

Yet drivers in some parts of the country can get full coverage for a fraction of that amount.

With such a wide disparity in insurance costs, it's hard to be certain you've got the best coverage at a good price. But if you've checked into these 12 savings strategies and discounts, you can be reasonably sure you're not leaving a lot of money on the table.

Shop around. Shop around. Shop around. Short of getting rid of your car, there is no faster or easier way to save on car insurance. The same driver in the same car will find rates that differ by hundreds of dollars, even thousands, from one insurer to the next. The more you pay, the more likely it is that you can save money.

Choose the right side of town. If you're moving, check the average car insurance rates in the neighborhood before you decide on a new address. ZIP codes matter a lot when car insurance companies set rates, and you may see a difference of a few hundred dollars a year.

Let your insurance company ride shotgun. If you drive very little and very carefully, programs that monitor your driving can cut your bills considerably. Plug-in gadgets send data back to your insurance company about how far, when and how you drive. Typically the data cannot be used to charge you higher-than-standard rates, only to give you a discount. 

Keep the shiny side up. According to an analysis of 841,000 quotes for "full" coverage (liability, comprehensive and collision) delivered through CarInsurance.com's comparison-shopping engine, drivers with a single accident claim pay an average of $300 more a year.

Pay your bills on time. With poor credit, you'll pay more to buy a car, and you'll pay more to insure it, too.

Raise the deductible. You can save as much as a few hundred dollars by increasing the deductible you'd pay when filing a claim against your collision or comprehensive coverage. Just be sure to put that savings aside in case you need it to pay the higher deductible someday. 

Drop collision coverage. Getting rid of collision coverage if you have an old car that you own outright could make sense if you wouldn't bother to repair it after an accident. (See "Is it time to drop comp and collision?")

Drop comprehensive coverage. Some drivers also drop comprehensive insurance, but because it covers a lot of events (theft, fire, flood, hail) and is a comparatively small percentage of the overall premium tab, it's worth keeping, says Michael Barry, a spokesman for the Insurance Information Institute.

Buy less liability coverage. Bare-minimum coverage has an extreme downside if you have any savings or own a home -- you could lose both if you cause an accident that exceeds your limits. But if you are "judgment proof" -- that is, you don't own anything -- you could save some money by dropping to the state minimum.

Send the kids to college. A college that's 100 miles or more from your home means  you can list your student as an occasional driver. That's typically cheaper than listing them as a primary or secondary driver.

Or make them hit the books. A"B" average earns a good student discount. Depending on your insurance company, that can save as much as 25 percent on premiums for the car the young driver is assigned to.

Teach an old driver new tricks. Depending on the state, discounts for taking a defensive-driving class can start at age 55. If the state requires insurers to offer a discount for the class, the provider must be accredited. But the discount can reach 15 percent, and it can be renewed by retaking the class, usually every three years.


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