By Joshua Murphy
August 11, 2006
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Car insurance isn't cheap, but it's a necessary protection for you and your family. You can get a better deal on your insurance by following these simple guidelines.

  1. Some things are hard to change: The price of your insurance is mostly controlled by a few uncontrollable variables. Your age, sex, and marital status all affect the rate you pay because insurance companies statistically justify charging different amounts to drivers based on these personal criteria. You can't really do much to change these--and I don't recommend proposing to your girlfriend just to get a better rate.
  2. Sell yourself a little better: Other determinants such as where you park the car, your driving history, and your credit rating can all impact the price you pay for auto insurance. Living in a low crime neighborhood can reduce the amount you pay. Safe drivers are rewarded with lower insurance rates because the insurance company expects that a driver who has demonstrated that he is a safe driver in the past will likely continue to drive in a similar manner.
  3. Good credit pays: A sticking point for many consumers is that insurance companies now adjust your rates based on your credit history. Good credit pays off with lower insurance rates; however, if you have poor credit, you are likely to pay a little extra.
  4. Get the minimum legal coverage: The amount and type of coverage that you carry can and does have a large effect on the price you are required to pay. A large full coverage policy costs much more than carrying the minimum liability coverage allowed by your state.
  5. Liability Insurance: Nearly every state requires that you carry, at a minimum, liability insurance. Liability insurance is designed to pay for damages that you cause when you have an accident. It does not pay for repairs to your car nor does it pay for medical coverage if you are hurt in an accident. If you're trying to get insurance coverage at the lowest rate possible, car owners have the option of carrying liability insurance coverage only. However, if a lien exists on your vehicle, you are required to carry full coverage insurance as opposed to liability only.

    If you're shopping for the lowest priced car insurance available, you should consider getting only liability insurance at the minimum level allowed by your state. Remember, though, that liability coverage only covers the other party should you be at fault in an accident. It will not cover the cost of repairs to your vehicle if you are at fault.

  6. Raise your deductible: If you are willing to pay more out of pocket should an accident occur, you can reduce the cost of comprehensive insurance coverage by as much as 30 to 40%.
  7. Carry your auto insurance with the same company that provides your home insurance. This usually qualifies you for a savings of as much as 15%.
  8. Look in all the right places. You can get the best insurance deals by shopping online. It's true! Insurance companies often have specials or deals that are only available online. You can easily save 10% by dealing directly with an insurance company and bypassing insurance agents. It's free to get an insurance quote, and it should take only a few minutes. Here are a couple of the companies and websites that I've found to be most helpful:
  • Allstate Just like it sounds, this is the website for Allstate insurance company.
  • Gmac123 A subsidiary of GMAC, this company also offers insurance coverage in all 50 states.
  • Progressive Progressive specializes in online insurance quotes. They have a relatively good track record, and the website is fairly intuitive and easy to use.
  • Geico Geico is a company very similar to Progressive. They specialize in offering most of their services online.
  • Yahoo Yahoo sometimes partners with insurance companies to provide online insurance quotes.
  • Insweb, Esurance, and Insure all provide access to online quotes as well.

Still want to know more? Check out Insurance Information Institute online for nine ways to reduce your auto insurance costs.

Quick Tips:
It's a good general rule that online insurance deals are almost always better than those that you can get through an agent. Compare the offers of both to prove it.