If you’re on a quest to lower your bills, take a hard look at your car insurance. Car insurance is an area that can yield monthly savings with just a few phone calls and inquiries. Many people get comfortable with their car insurance company and just continue to pay the premium year after year, without making adjustments. But it’s a good idea to evaluate your car insurance once a year to make sure you’re getting what you need at the best price.

Shop Around

Prices can vary a lot between insurance companies. When we switched insurance companies several years ago, we ended up getting better coverage at a lower price. Shopping around is as easy as making a few phone calls. Oftentimes insurance companies can give you a quote over the phone.

You should compare at least three insurance companies before making a decision. Checking out three to five companies will give you a good idea of how expensive insuring your car will be. Make your final decision based not only on price, but on the company’s reputation. It’s no good to have car insurance with a company that has a reputation for not coming through when a customer needs it.

Ask About Discounts

Insurance companies offer a wide variety of discounts, so make sure to ask if you qualify for a price break. Typical discounts include the good driver discount, a discount for multiple policies (for instance car insurance and home insurance), good student discounts, low mileage discounts, and car safety discounts.

Discounts may vary by insurance company, making step number 1, shopping around, very important. Make sure you ask about any discounts when you shop around.

Use Your Good Credit

In many states, credit score can be used to help determine insurance premiums. Even companies that don’t use credit scores to determine premiums may offer discounts for customers with good credit. Our insurance company sends us a notice each year, asking us if we want to allow them to use our credit to help lower our premium. Of course we do!

Knowing that insurance companies use credit scores makes it important to stay on top of your credit. If you know you have bad credit, work to improve it. And it’s a good idea to review your credit report frequently. You can get a free annual copy of your credit report from each of the three credit reporting agencies at www.annualcreditreport.com.

Raise Your Deductible

Car insurance premiums get lower as your deductible gets higher. If you can afford to take a deductible of $500 or even $1,000, you will save money over a policy with a $250 deductible. Before raising your deductible, however, make sure you have the money in savings to cover it.

Also, if you have an old clunker car, consider dropping collision and comprehensive insurance. There’s no sense paying a monthly insurance premium on a car that isn’t worth the deductible.

If you have any doubt whether or not you’re getting the best value on your car insurance, make a few phone calls. You may find that you’re able to save a pretty penny, just by making a few adjustments!

Do you have any tips to help us save more money on car insurance? Please share!

Photo from Wikimedia Commons.