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10 Tips for Buying Car Insurance That Will Save You Money

Having adequate car insurance is both smart and prudent, but there's no question that it adds to the expense of driving. The good news is that premiums can vary by hundreds of dollars depending on a number of factors. Review your coverage at renewal time to make sure your insurance is in step with your needs, and follow these practical steps to reduce the bottom line on your auto policy.

Section 1: Review your coverage

A driver needs to evaluate the types of coverage they require to drive in each state and review the premium it costs to carry those items and make sure you're in compliance. Specifically, if you want to drive full time across state lines, which is legal, it's necessary to carry comprehensive coverage which includes auto damage and comprehensive collision.

Shop around for the best rates

The first step is to use a car insurance comparison website like The Safewise List or to compare the various options available. Because your insurance company is often the middle man between you and your insurance broker, they will almost certainly prefer that you buy from them.

This is particularly true when there's a significant difference between policies. For example, policies with the same level of coverage can have drastically different deductibles.

The low price of cheap policies for a family might be easy to justify, but higher deductibles would offset some of the savings.

If you're close to renewal time, you can often save a lot by shopping around.

Compare deductibles

It's good to know in advance what your out-of-pocket expenses will be, so be sure to compare deductibles and their values with your current provider to ensure that you have the right amount and type of coverage. This will give you a sense of how much money you should have set aside in a flexible spending account if you have one.

Figure out what coverage is necessary

If you're driving your employer-provided car for work or running a taxi service, you'll need liability insurance to cover the company's liability, plus cover for your own personal driving. If your business operates in a way that requires you to pick up people from the airport, then you'll need to ensure your car and buy comprehensive insurance.

Consider a high deductible

A deductible is an important factor in insurance calculations, but the specific amount of a deductible varies from state to state. What's the right amount for you? A high deductible ensures that in the event of an accident, you're paying for your own expenses and that you can pay them without exceeding your policy limits. However, higher deductibles will add to your insurance costs as your premiums will be charged as though you had a higher value vehicle, even if you're only driving a secondhand or basic one.

Keep the same coverage

Most companies require that you keep the same insurance coverage for your car, even if you switch to an umbrella insurance policy for other expensive items, such as electronics, or if you add a loan for a second vehicle.

Find the type of coverage you need

The first step to finding the best car insurance deal is to consider your preferred coverage. A good rule of thumb is to ask yourself: Does the type of car you drive offer the right amount of coverage for your lifestyle? For example, if you drive a $40,000 Honda Accord, insurance should be among the lowest on your list.

[Read: The Basics of Car Insurance.]

To narrow down your choices, talk to your current insurer about the coverage provided for your specific car. They may offer a specific level of coverage that's too expensive or excessive or a limited amount that's not appropriate for your needs.

Now's also a good time to compare quotes for other types of coverage.

Get repair discounts

You're able to negotiate discounts on auto repairs with your insurance provider. Depending on the policy, you might be able to use your policy's mileage allotment to reduce the price of your repairs. Check your insurer's repair guidelines and your policy document to determine what work your policy allows. You might be able to get a substantial discount if your car has low mileage, which might lower your annual deductible and lower the cost of having a repair done.

Always remember to ask about bundling discounts. Many insurance providers bundle several standard driver's policies into a package and offer discounts on each other. In some cases, you might be able to negotiate a discount on all your policies.

Buy car insurance with a co-pay or low co-pay/deductible

Co-pays and deductibles are included in insurance premiums, but many people don't realize it. Most auto policies include co-pays when you go to the doctor, as well as over-the-counter medications. If you get your car insurance through your employer, your co-pays may be deductibles. If you need a claim adjuster on-site at your home, you may be on the hook for a deductible. Your co-pays, deductibles, and the like are often listed with your insurance company.

Be sure to remember that your co-pays will change with your age. If you're buying an older car, you'll pay more for car insurance, because the premiums will be higher. This is a great time to shop for a new car and see how much the premiums increase. Make sure you're buying a new car with no or low deductibles.

Don't forget about uninsured motorist coverage and personal injury protection

Drivers with comprehensive coverage are protected from all collisions with no injuries or property damage, while those with additional coverage cover bodily injury and property damage in some cases. In either case, you need your policy to include two separate, additional costs.

3. Buy With Your Base Premium

It's probably a good idea to make sure that your personal and family policies are similar in their costs, so you can compare them at renewal time and be sure you're getting the most value for your money.

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