Ways to Lower Your Car Insurance Premium

Does the amount of money you spend each month on auto insurance seem excessive? The rate of your premiums depends on many obvious factors, such as the kind of car you drive, your age, and your driving history-most of which you can't change. But there are some things you can do to reduce your payment after you've chosen your car.

What Insurers Look For

Obviously your insurance agent doesn't just set your rate based on a gut feeling about you. But how do they come up with the premium? This magic number is determined from several factors that go well beyond our age and sex. Your insurer wants to determine the likelihood of you filing a claim, and if you do, what it will cost them. In order to do that, he or she is interested in numerous details of your life such as driving history, occupation, miles driven per day, location, and credit history.

This is how it works: If your occupation, for example requires higher-than-average driving, your risk to an insurer goes up and thus, your premium does as well. But if you have excellent credit history, this demonstrates that you're responsible with payments and your insurer can count on receiving payments on time, a factor that lowers your premium.

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Getting the Lowest Premium

There are several well-known factors that lead to lower premiums such as being over 25 and having little or no traffic violations. But this might not be something your can change overnight. So here are some less familiar things that also lower your monthly bill.

• Increase Your Deductible
  Going from a $250 to a $1,000 deductible could chop 25 to 40 percent off your monthly bill. You may like having a low deductible in case of an accident, but the money you save each month can more than make up the difference in the case of a claim after a year or so.
• Improve Car Security
  Theft of your car or from your car is an important risk factor to insurance companies. So much so that they are often willing to give premium reductions for cars with security systems installed.
• Reduce Annual Mileage
  A high amount of miles driven implies more risk to an insurer. That is, the more miles you drive a year, the higher your premium will be. So having a short daily commute is in your favor.
• Shop Around
  Prices vary from company to company because some place more importance on specific factors than others. Get at least three price quotes before deciding and be willing to change insurance companies that might offer a much lower premium if your premium seems too high.
• Seek Out Discount Lists
  Many companies offer discounts to policyholders for reasons such as avoiding accidents and traffic violations, good grades, or the completion of a defensive driving course. Be sure to ask your insurer about what's available.

Remember, your current premium is not an infallible figure. These are just a few of the ways you will find discounts-and all of them are within an individual's ability to change.

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