For the most part, the motor vehicle administrations located statewide throughout the United States have “point systems” which are used to track accidents and violations that impact your driving record. This point system is especially pertinent when one is looking to purchase car insurance. Car insurance companies will order a copy of the applicant’s driving license record to determine what rates to charge. The higher the amount of points you have accumulated, the higher the premium.

This topic becomes a bit confusing when one tries to decipher between the individual state driving record point system and the insurance company’s point system. Every state decides how many points to assign to various infractions committed and over what time period a driver can be held accountable as well as how severe action taken may be. These points are sometimes referred to as demerit points. Each state also sets rules pertaining to how long points stay on one’s driving record and how long an auto insurance company can use such points to determine premiums.

State Point Values

There is no standard point value by state for any one offense. Some states permit certain violations, such as DUIs (Driving Under the Influence) to remain on your record far longer than a speeding ticket. For example, Oregon counts all convictions and avoidable accidents regardless of severity as a single occurrence with no additional points for major infractions while Wisconsin has a point ranking system by severity: minor violations are awarded two points while the most serious infraction is awarded six points. Such information can generally be found on the website of your state’s DMV.

In addition to the unique point system of your particular state, every insurance company has its own method of evaluating car insurance applicants. As it pertains to insurance, it is safe to assume that the more points you have accumulated on your driving record, the higher your insurance premium may be. Because each insurance company has a complex rating algorithm, it is virtually impossible to compare. Typically, you can expect the rating algorithm to put an insurance point value to each infraction (as shown below).

Description	Points (1st Occurrence)	Points (2nd Occurrence)	Points (Additional Occurrences)
At-Fault Accident	2	3	2
DUI	1	2	3
No Charge Violation	0	0	0
Major Violation	4	4	4
Minor Violation	2	1	1
Not-At-Fault Accident	0	0	0
Speeding	3	2	2

Based upon the value established by the insurance company, a different rating factor is then used to increase or decrease the rate or premium. One major violation could have the effect of increasing your premiums by 26% a year. After arriving at a score for a car insurance applicant, the insurance company feeds the insured’s information into a computer which checks through information and spits out an answer. Often, the mathematical algorithms used to arrive at this answer are too complicated for the average insurance representative to discuss, but all should have underwriting guidelines along with any rating change guidelines to help explain.

Similarities among the rating methods include looking at an applicant’s accidents, traffic violations and claims (comprehensive or liability claims). Some insurance companies look at 3 years, some look at 5 years while others look at 7 years. Most look at incidents incurred by any driver that will be covered by the policy during the preceding three (3) year period. Persons that share characteristics with a group having high claims experience are charged more than if associated with a group having lower claim experience.

How Points Affect Your Insurance Premium

To understand in simpler terms, insurance companies base their rates on the risk factors associated with the applicant. Therefore, even if someone rear ends you at a stop light and you deem yourself not to be at fault, if you have had a speeding ticket or other violation prior to this accident, you might be considered an at risk driver. The number of accidents you are in directly affects your premium. You could be in four no-fault accidents, and you could still see an increase in your premiums. The insurance company’s justification: even though the authorities determined these accidents not to be your fault, something must be wrong with your driving if you were involved in so many crashes. Insurance companies may also worry that insurance fraud is playing a role in this equation. It is not unheard of for people to orchestrate accidents to reap settlements from insurance companies. This is why a high number of no-fault accidents could cause insurance companies to be suspicious.

Depending on where you live, you may be able to remove points by attending traffic school. There is normally a limit as to how far back insurance companies can look at your driving record for rating purposes; three to five years is typical.  Thankfully, in my 10 or so years of driving, I’ve never accumulated a point on my license, so my ridiculously high car insurance premium is actually lower than it could be.

The best way to keep points from accumulating on your driving record, thereby raising your car insurance premiums, is to drive safely and obey the law. Unfortunately, you can be the world’s safest driver and still face high rates, as your driving record is not the only component of your application being scrutinized: the year, make and model of the car as well as your credit history/score will also be considered.

In May, I wrote about how I decided to install Progressive Snapshot, a device that tracks the performance of my car while I drive.  This device can tell you at what time you’ve driven, how fast you drive and at what speed.  Progressive offers this service to all policyholders who drive a vehicle launched 1996 or later as a way to gather data on drivers, while potentially saving them money on car insurance payments.

After driving with the Snapshot device for one month, the verdict is in.  Progress has decided to cut my auto insurance payments by 27%!  This means that my normal $110 a month auto insurance payments will now be $81 a month, and that’s a pretty nice savings of $350 a year.

The discount I received however is only temporary until Progressive decides to take back the Snapshot device.  This is done to ensure that my driving habits for one month are similar to my driving habits forever, and while there is no immediate timetable that I must leave the Snapshot device installed in my Mustang, the longest time-period is six months.  Progressive also states that during this period, I could stand to gain yet another discount, however smaller than the one already received.  Since I only use this car to run errands and take the occasional trip once a blue moon, I’m confident this discount will stick and I might even be able to reduce my car insurance even further!

Perhaps the nicest part of this whole experience was just how simple this entire process was.  After signing up online for Snapshot (which took all of 60 seconds), I received the Snapshot device, installed it and just watched as my data was complied.  Progressive allows you to check your driving performance everyday, informing you of high risk driving times, rate of speed, distance traveled and hard brakes.  All of these factors led to my 27% initial discount and once 30 days was up, Progressive immediately revised by auto insurance rates and sent out my new contract.  I had to do absolutely nothing after installing the device and only when I return it (Progressive provides a box with prepaid shipping) will I have to do anything else.

So long as my rates remain reasonable with Progressive, I predict I’ll be a lifelong customer of theirs.  My discount remains in tact as long as I have this car insured with Progressive, and should I decide to insure any other car, I can request another Snapshot device and start the process over.  Progressive makes it very clear that there is no risk on the consumers end to try this program, and policyholders can only receive a discount from this program, not a surcharge.  If you have Progressive auto insurance and are looking to lower your rates, Snapshot is a must.

Progressive Insurance is one of the fastest growing insurance companies in the US. Currently, Progressive has over 12 million premiums, which makes it the third largest auto insurer behind State Farm and Allstate.  They also have an impressive website and Progressive has taken their snazzy website and decided to pack some of its features into an application for use on the iPhone.  We tested out the app and laid out all the features below.  Some features are reserved for policyholders while others are open to everyone.

Features for Policyholders

If you are already a Progressive Insurance customer, you can benefit more from the Progressive app than a non-policy holder.  Each Progressive customer has a Progressive.com account.  With this application, you can log into your account directly from your iPhone.  When you are logged in, you can check when your payment is due and easily make a payment, assuming you have already saved your billing information to your account.  This feature might come in handy if you are on the move and forget to make your premium payment.  It can be dangerous to miss this payment, as you don’t want to be left uninsured.

Anyone who has snapped a picture using the iPhone’s camera is well aware of its capability.  The Progressive app takes advantage of that technology by allowing you to submit a claim and include photos taken on your iPhone.  This might prove useful if you return to your car after a particularly violent storm to find a tree branch has fallen on your windshield.  You can instantly snap a picture of your poor vehicle and submit a claim to Progressive.  An insurance agent will have to follow up with you via phone, but submitting a claim with the app will help speed the process along.

Sometimes when you get in an accident or need to file an insurance claim, you inevitably have to dig through crumpled paperwork stuffed into your glove compartment.  The Progressive iPhone app allows you to access all your insurance information, including your Insurance ID card and policy details, wherever you have your iPhone.  This can help ease a process that is never terribly enjoyable.

Lastly, if you are a Progressive policy holder, you can use the app to locate a service center.  This combines the utility of your phone’s GPS with the capability of Progressive’s service center search.  Progressive also offers an option where they will take care of your entire claim including arranging and guaranteeing all repairs.

Features Available to Everyone

If you aren’t a Progressive customer, you likely won’t find their iPhone app to be extremely useful—unless you really like to watch Progressive TV commercials, which the app facilitates.  To be clear, the app does offer certain helpful tools.  For instance, you can find a local agent by entering your zip code.  The app will return the agent’s contact info, location, and availability.  In addition, you can use the app to request a car insurance quote. Unfortunately, if you want a quote for a motorcycle, boat, or car, you have to contact Progressive by phone. The feature I found to be most convenient was the vehicle comparison tool.  Researching vehicles is somewhat of a strange hobby of mine.  The Progressive app allows you to compare vehicles based on safety information, vehicle recalls, crash test results, and the cost to insure the respective vehicles.

In summary, I would say the Progressive app provides a nice convenience for Progressive policy holders, and is largely unnecessary for non-policy holders.  In addition, filing a claim still ultimately requires you to talk to an insurance agent.  Although this review focuses on the app for the iPhone, Progressive also offers a similar app for the Android phone.

A few weeks ago, I got in a car accident near my home in southern California.  My car was toast, but luckily the other driver and I both walked away without sustaining any injuries.  If we weren’t so fortunate, and instead ended up in the hospital, we might be exploring whether our auto insurance policy includes Personal Injury Protection (PIP).  Understanding PIP is important if you want to ensure that you are adequately covered on the road.  Below, I will explain what PIP is, who needs it, and how it functions.

What is PIP?

Personal Injury Protection insurance is a type of auto insurance that covers medical expenses for injuries sustained in a car accident.  PIP is sometimes referred to as “no-fault” coverage because it will cover you regardless of whether the accident was your fault.  In many states, PIP will cover more than just medical expenses.  It might reimburse you for lost wages from missed work or costs incurred because you can’t perform certain tasks due to your injuries.  However, the “Personal” in Personal Injury Protection means that the insurance only covers the person who has the insurance.  If you are found liable in an accident, your PIP benefits won’t pay for the other person’s injuries.  It goes without saying that PIP also won’t cover damage to your car or the other driver’s car.

How is it applied to car insurance claims?

If you are hurt in a car accident and have PIP, notify your insurance company and they will activate the coverage.  This process might take a little time, but don’t wait to receive treatment.  You or the hospital will submit your medical bills to your insurance company.  If you exhaust the funds provided by PIP, you will then have to submit medical bills to your health insurance company.  One thing to keep in mind with PIP is that the insurance company will pay medical bills and reimburse lost wages in the order they are received.  If you think you might have significant medical bills, make sure you submit the lost wage forms early.  That way you will receive reimbursement before you exhaust the PIP money.

Who needs PIP?

Some states require PIP coverage, while others make it optional.  The District of Columbia and the following twelve states require PIP insurance by law:

• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Utah

PIP is mandatory in these states because they have what is referred to as no-fault insurance law.  This means that each party has to pay for their own damages.  They implemented this system because they believed it would reduce the number of lawsuits filed against drivers who were at fault in accidents, thus freeing up the legal system for more serious issues.  No-fault laws are also supposed to reduce insurance fraud.  PIP is not mandatory in the other 38 states.

What are the PIP limits?

The amount of PIP required by states differs, but the average amount is $10,000.  Some states require much more than that.  New York has a minimum requirement of $50,000 PIP.  As mentioned above, most states don’t have a PIP requirement because they use a tort system for auto insurance.  A tort system requires that the state determine who is responsible for causing an accident, and makes that person pay for costs incurred in the accident.  My home state of California operates this type of system.

Let’s go back to my recent car accident to see how PIP might operate in a real scenario.  If the other driver and I were both hurt and sent to the hospital, California insurance law would require the driver at fault to pay the medical expenses.  If instead I were a Michigan driver and collided with another driver while passing through Detroit, we would both presumably have PIP insurance.  My PIP insurance would pay my medical bills and his PIP insurance would pay his medical bills.

If you live in a no-fault state, your insurance premiums tend to be higher than in other states because you are required to have more coverage.  You might save some money by shopping around online for the best rate.  This can be done easily by entering your information on insurance company websites and comparing auto insurance quotes.

Your car insurance provider frequently tells you to report even the most minor car accident.  Contrary to these instructions, sometimes it’s best not to file an insurance claim.  A few years ago, I was in a minor fender bender with another car.  I admit, it was definitely my fault.  But the damage was minor, and I thought I could afford the repairs out of pocket.  I exchanged insurance information with the other driver, but he agreed not to report the incidence to his insurance company.

About a week later, I paid to repair the dent in his driver’s side door.  I didn’t have to deal with an insurance agent and I guaranteed that my insurance premium wasn’t raised.  My accident represents just one circumstance where it might be smarter, easier, and, in the long term, cheaper not to file a claim.  Let’s first look at why your auto insurance rates could increase due to a car accident.  Then we can try to sort out when not to file a claim.

What might increase your insurance rates?

Filing a claim might get you off the hook for paying for that single incident, but it likely will negatively impact your insurance rates, which can cost you dearly down the road.  Insurance companies use complex calculations to determine the rates you pay.  These are not entirely understood.  But we do know of several actions that are generally known to lead to higher insurance rates or even losing your insurance policy altogether.

If you file too many claims—or even the wrong kind of claim—your premium could go up or coverage might be dropped.  One claim is unlikely to affect your premium, but multiple claims will almost certainly cost you, particularly if you have other driving infractions on your record.  Consulting with your insurer about whether or not to file a claim can also lead to increased rates.  Though he might seem like a nice fellow on the telephone, your insurance agent is not necessarily a trusty advisor.  Some agents are obligated to report you to the company if you even discuss a potential claim.

A car accident can be an emotionally taxing experience.  In its immediate aftermath, the tendency is to call your insurance company and have them sort out the mess.  Insurance companies try to promote this behavior by specifying that they don’t have to cover your accident if it’s not reported promptly.  Most car policies have this stipulation.  Although filing an insurance claim is often the right decision, it’s important to remember that there is no law that requires you to tell your insurer about a car accident.  As previously noted, any dealing with your insurance company can cost you money—even when you’re not at fault in an accident or don’t intend to file a claim.

When NOT to file a claim

Unfortunately, there’s no easy formula to determine whether or not to file an insurance claim.  The best approach might be to remember what purpose insurance serves—it is meant to provide protection against unaffordable, crippling costs.  That means even if you pay your insurance premiums regularly and on time, you should probably not instantly turn to your insurer following an accident.

• If you’re in a single-car accident that involves less than $1,000 in damage, you might be better off not filing a claim.  For instance, if you back into a pole and the only damage is to your vehicle, you might want to pay for the repairs yourself and avoid facing possible insurance rate hikes.

• If you’re at fault in an accident with another car, and the damage is less than $1,000, you might want to try to convince the other driver not to report the incident to his insurer.  It is required by law to exchange insurance information after an accident.  But if you could pay for his car repairs out of pocket or even with a credit card, it might save you money in the long run by keeping your premium costs down.  You will want the other driver to get a repair estimate fairly quickly.  Estimating repair costs can be tricky, and you want to be able to file a claim within the designated time period if you underestimated the repair costs.

• If you’re involved in an accident and the other driver is at fault, you face a trickier situation.  If you trust that the other driver will pay for your auto repairs, you might consider not filing a claim.  Remember, even if you are not at fault in an accident, filing a claim can raise your insurance costs.

When to file a claim

There are some incidents where it might be quite risky not to file a claim.  If the other driver suffered an injury in the accident, you should always file a claim.  Likely, you won’t have a choice in the matter since the other driver will almost definitely insist on telling his insurer.  If you or your passenger suffered an injury, you probably should file a claim as well.  Medical costs associated with car accidents can be unpredictable and can quickly get out of hand.

Filing a claim can result in rate hikes between 20-40%.  To save yourself from years of increased costs after a car accident, be sure to give serious thought to whether filing a claim is the right decision.

Buying a car can be an exciting time. Unfortunately, this excitement can be somewhat deflated by the prospect of choosing an insurance policy and the appropriate amount and type of coverage. In order to actually choose the best policy for your driving needs, it is first important to be educated on the different types of insurance including liability, comprehensive and collision. When would it be acceptable to be covered only by liability insurance?

Automobile insurance is regulated at the state level. Accordingly, each state has a minimum amount of car insurance coverage that is acceptable for drivers to carry. Certain states require that motorists carry liability insurance coverage to ensure that their drivers can cover the cost of damages to people or property in the event of an automobile accident whereas other states, such as Wisconsin, have more flexible “proof of financial responsibility” requirements. Traditionally, in the United States, liability insurance covers claims against the policy holder and generally, any other operator of the insured vehicle, provided they do not live at the same address as the policy holder, and are not specifically excluded on the policy.

All states have laws regarding the minimum amount of liability coverage you must have in order to legally drive your vehicle. State minimums are expressed in three parts. For example, a state’s legal minimum could be 20/40/18. In this example, the first number means that the insurance company will pay a maximum of $20,000 for a single individual injured, per accident. The number ’40′ signifies the amount, $40,000, your insurer pays as a whole for all injuries in a single accident while the third number signifies the maximum amount the insurer will pay for property damage coverage per accident. Consumers are always encouraged to purchase more than the minimum coverage.

The two types of coverage insurance on top of liability car insurance are collision coverage and comprehensive coverage. Comprehensive coverage does come without collision car insurance, but collision does not come without comprehensive. An insurance policy that has liability coverage and comprehensive coverage does not constitute “full coverage” but is more than the minimum legal coverage. Another term to refer to comprehensive coverage is OTC or “other than collision” coverage and covers damages that arise from something other than a collision such as theft, fire, weather damage, etc. Comprehensive coverage is intended to cover events that are less likely to be your fault. Collision coverage is designed to help pay for damage to your own automobile such as auto repairs In your auto insurance policy, collision coverage helps pay for auto repair or replacement.

As long as you have a lien against your car (i.e., you have taken out a car loan) lenders require car owners to carry collision and comprehensive insurance. After the vehicle is paid off, it is usually up to the insured whether to maintain coverage or drop it. When is it smart to own only liability insurance? One good rule of thumb often cited in the industry is to recommend cancellation when the collision and comprehensive portion of your annual insurance premiums are greater than 10% of the car’s book value. For example, if you have a car that is worth $30,000 and the premium for collision and comprehensive is $3,700 a year, it might be wise to cancel the insurance. Then again, how much are you willing or able to pay out of pocket if you are at fault for an accident?

A study conducted by Insure.com looked at how coverage would change for seven cars, calculating average national premiums for a 40-year-old single male driver. Liability policy limits of 100/300/50 assume a $500 deductible. A 2004 year model was used because drivers often drop collision and comprehensive insurance on older cars.

Dropping your car insurance to minimum state liability levels could be risky. Although you would save money in premium payments by dropping comprehensive/collision coverage, it might not be worth it in the end if you have an accident especially if you have a house, savings and investments, all of which could be put at risk if you were at fault in an accident.

As any driver knows, a whole host of variables can affect how much you pay to insure a car on the road. Getting older? The most dangerous drivers are younger than 25, the safest between 50 and 65. Statistically safer drivers, women tend to pay less. Accidents and tickets within a recent number of years will drive up your premiums. A poor credit rating can drive up your premium, and an expensive car certainly will.

But then there’s one variable a driver sadly can’t do much to change and that’s geography. Here are the ten states in which it’s most expensive to insure a motor vehicle (Criteria was average policy across all states):

1. District of Columbia - Perhaps due to its #2 spot on the list of worst traffic gridlocks, residents of our nation’s capital can expect to pay an average of $1,176 in insurance premiums each year.
2. New Jersey – In the Garden State, an annual premium of $1,135 is typical.
3. Louisiana – Bayou State drivers spend around $1,102 each year.
4. New York – If you want to enjoy that Sunday drive in the city, insuring your automobile in New York can cost you an average of $1,047 annually.
5. Florida – At first glance, one might think the large retiree population in Florida might drive down insurance averages. Not so: Florida residents pay an average $1,046 each year.
6. Rhode Island – Residents of the smallest state pay on average $1,033 in insurance premiums each year.
7. Delaware – Living in Delaware comes with pride in residing in the first state to ratify the Constitution. Driving in Delaware comes with an average insurance expenditure of $1,022.
8. Nevada - For the short drive to Vegas, drivers in Nevada offer up $1,011 annually to keep their vehicles on the road.
9. Massachusetts – Massachusetts residents pay an average of $996 per year.
10. Connecticut – The Nutmeg State trails in on our list at #10 with an average annual amount of $988 spent on auto insurance.

Wondering how far away these states are from the middle?  The average annual expenditure in the United States is $810.

So, why the high premiums in these states? It could be any number of reasons. For instance, in states with a healthy economy, drivers tend to buy newer cars. New car owners are more likely to pay an extra premium to cover for physical damages, driving up average cost. You’ll also notice that high premium states tend to be more urban states. More drivers means more traffic which leads to more accidents, which then translates into more risk for the insurance company and higher premiums for premium paying drivers. Other factors affecting premiums include theft rates, and varying liability requirements from state to state.

Remember, some things affect your premiums regardless of where you live. To make sure you’re getting the best bargain, check your credit report to make sure it’s accurate, and consider installing an anti-theft tracking device. Depending on the discount offered by your insurer, it might pay for itself, and give the added benefit of peace of mind. Call your insurer to see if there are any discounts they offer that you qualify for but are not taking advantage of.  And finally, make sure you do your homework and shop around. Compare auto quotes online to make sure you’re paying bottom dollar for top dollar coverage.

Yesterday I witnessed a car accident. I was headed to work on a two lane road, when I heard the car that had just passed me going the other way lay on the horn. In the rear view mirror, I saw the car smack into an SUV that had pulled out in front of it. Fortunately nobody was seriously hurt, but it offers a good opportunity to think about ways we can all lower the cost of car insurance.

Car insurance is an unavoidable expense that all vehicle owners must incur. Whether your bill arrives annually, bi-annually or monthly, car insurance is not an expense we enjoy paying. Thankfully, there are several steps you can take to reduce the costs of car insurance.

Be A Good Drive

Being a good driver can reward you with a lower insurance rate. The very best and most basic way to reduce your car insurance bill is to have a good driving record. This means you need to exercise caution when you are driving and obey the speed limit. Here are a few everyday reminders:

• Focus on the road: Don’t talk on your cell phone, send text messages or consume things that are difficult or messy to eat (like tacos or sub sandwiches) behind the wheel. Operating a GPS system behind the wheel is also dangerous. And on this point I’ll add one other thing–your kids are watching you. Do you want your 16 year old texting while they drive? They’ll will follow your lead in how to operate car. If you text, they’ll text (and I’m preaching to the choir on this one).
• Obey speed limit signs: Speeding tickets add points to your record and often result in automatic increases in your insurance bill.
• Use extra caution in residential areas, construction zones and school zones: These areas present more opportunities for accidents, and the fines for moving violations are higher.
• Drive defensively: Be aware of other vehicles in front of you and behind you. When in doubt, err on the side of caution. I suspect the car that passed me yesterday could have avoided the accident. From my vantage point, he was more interest in not letting the SUV get in front of him than he was avoiding an accident.
• Prepare in advance when driving in unfamiliar territory: Review maps prior to your trip. Pull over if you need to look at a map again or ask for directions.

Comparison Shop for Low Rates

Prices for car insurance will vary from company to company. At minimum, you should secure at least three quotes from three different companies when you are shopping for the lowest rates. You should also try a combination of local shopping with insurance companies and online shopping. When you shop local, ask coworkers, friends and family for referrals to companies that deal with auto insurance in your area. Referrals are a great way to find the lowest rates without spending a lot of time on the phone calling for quotes.

When you shop online, there are a variety of websites that will generate multiple results from different insurance companies. It’s easy to compare auto insurance quotes from several insurance companies online through companies like Insureme.com.

Change Jobs

Often insurers offer discounts to employees of certain companies or even to entire industries. For example, a company might offer a discount to engineers because as a whole they have proved to be less risky. If you have recently changed job then it might be worth calling your insurance company to let them know.

Reduce Coverage on Older Cars

As your vehicle ages, the need for collision and comprehensive coverage begins to decline. A general rule of thumb is that if your car is not worth 8-10 times the premium rate, then full coverage may not be entirely cost effective. You can determine the general worth of your vehicle online with the services of Kelley Blue Book or by consulting with your local auto dealer or bank. Check the value of your car against the cost of your annual premiums and adjust your coverage accordingly each year.

There are also interactive online calculators that can help you determine the amount of coverage you need. You can find an easy to use coverage calculator at carinsurance.com.

Buy Home and Auto Insurance from the Same Company

Some insurance companies offer special rates to customers who insure several entities at the same time. Home and auto insurance packages are especially cost effective. You might even find special rates on insurance for other items such as motorcycles and recreational vehicles too when you purchase policies from the same company. When you purchase your policies for various coverage products through the same company, you may also be eligible for extra savings that are added on year after year in appreciation for your loyalty.

Put Your Teen On Your Policy

You will pay less for your teen to drive if you put them on your policy as opposed to putting them on their own, separate policy. It’s always less expensive to add to your existing policy.

Keep The Grades Up

If your teen or college student keeps their grades up that can mean a discount for mom and dad. This might also apply if you are an adult going back to school.

Ship Off Your College Student

Some insurance companies give a discount when your child goes to school 100 miles away and does not have a car with them. The idea is if they don’t have a car, then they won’t be as likely to get in an accident.

Don’t Pay For Things You Don’t Need

Take a good look at your policy to make sure you aren’t paying for services that you pay for elsewhere. For example, if you have Triple A then you don’t need roadside assistance with your insurance company. Plus, if you use the roadside assistance with your insurance company your premium could go up. Services like this can be separate from your insurance policy.

Choose A Higher Deductible

If you are willing to go higher on your deductible then you could save yourself hundreds. Use a savings account instead to save up for a deductible in the event you have to use it. Preparing ahead is key here. Insurance deductibles are regulated by each state. Where we live, the maximum deductible allowed is $500, and that’s what we have. Check with your insurance agent to see how much you can save by raising your deductible.

Have A Good Credit Score

Our credit scores are becoming more and more important these days. Many insurance companies calculate your rate based on how good or bad your credit score is. The better your credit score the better rate you are going to receive on your insurance.

Low Mileage Discounts

If you don’t drive much or you work from home and therefore you don’t put many miles on your car then ask for a low mileage discount. Often you will receive a discount if your mileage is less than what they consider normal. Having low mileage can pay off in the form of a lower insurance bill.

Safety Feature Discounts

If your ride has special safety features like an anti-theft device or motorized seat belts you might be able to get a discount. Even if you add your own anti-theft device like an alarm system this could give you a discount. This type of discount might be listed in the “Other Discounts” section, so be sure to ask.

Senior Citizen Discounts

Sometimes it pays to be older and wiser because many insurance companies offer discounts to senior citizens – you just have to ask!

Pay Up Front

Some insurance companies offer a discount if you pay upfront instead of electing to pay monthly. Even if you pay for the entire year upfront and decide to switch companies they must refund you. You will only be responsible for the pro-rated amount which means they will owe you a refund.

Choose Your Car Wisely

Usually when we are out shopping for a new car we don’t think much about our insurance company. However, insurance rates vary depending on the make and model of the vehicle that you drive. It is important to do some research on costs associated with insuring the type of car you are considering before you buy. Certain factors that determine the cost of insurance include the price of the car, its safety record, likelihood of theft, and the costs of parts to repair the vehicle. State Farm publishes vehicle safety ratings on their website.

Foreign vehicles are often more expensive to insure because the costs associated with repairs are much higher. There are also a variety of safety features on a car that can reduce insurance costs. When you shop for a car, look for vehicles that have daytime running lights, anti-theft devices, air bags and other safety features. You can find a great deal of information regarding vehicle safety and safety features at the Insurance Institute for Highway Safety.

Get Married

There are insurance companies that view married couples as less risky and therefore grant them a discount. If your status changes be sure to inform your policy holder and ask for a discount.

Graduate from College

Many insurance companies offer discounts to certain alumni members. Check with your college or university to see if they have a list. Also, just by graduating college might even get you a discount.

Photo: Zac Wong via Flickr