There are a variety of factors that determine the cost of your car insurance premiums. Here are some tips to help you lower your insurance costs.

Look for Car Models with Lower Insurance Costs
Before you buy a new or used car, look into the costs for insuring it. Car insurance premiums are based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. High-end luxury cars and performance vehicles cost more to repair, maintain and insure than family sedans. The same applies to classic cars: the more expensive to buy, the more expensive to repair, maintain and insure.

To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).

Safety Makes a Difference
Keeping a safe, clean driving record can lower your rates. Choosing a car with additional safety equipment can mean discounts. Taking a driver training or accident prevention course may qualify you for lower premiums. Ask your agent for details.

Combine your Insurance Policies with One Company
Many insurance companies will give you a price break if you have more than one type of insurance with them. You can combine homeowners and auto insurance, and you may get a break for having multiple cars insured with the company. You may also have lower rates if you’re a long-time policy holder. It still pays to shop around, because you may save more money by combining policies from different companies compared with a multi-policy discount. Generally speaking, however, you will save money by combining your insurance with one company.

Request Higher Deductibles
A deductible is the out-of-pocket amount you will be required to cover in the event of a loss. The higher the deductible on your car insurance policy, the lower your premium.

Increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

Changes in Your Life?
Are you still insuring drivers who no longer live with you? Do you drive less for your job than you used to? Have you just gotten married, or graduated from college? Are you living in a different part of town? Is your teenaged driver getting good grades in school? All of these things affect how much you pay and could result in discounts.

Reduce Coverage on Older Cars
Consider dropping collision and/or comprehensive coverages on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley’s Blue Book (www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.

Maintain a Good Credit Record
Building and maintaining a solid credit history can reduce your insurance costs. Insurance companies are increasingly using credit scores to determine the cost of auto insurance coverage. Pay your bills on time, don’t obtain more credit than you need, and keep your balances as low as possible. Pay off your revolving credit accounts if at all possible, and close any accounts you’re not using. Check your credit record on a regular basis, and correct any errors promptly so that your credit records are accurate. You may want to subscribe to a service that periodically updates you on any changes or issues with your credit rating.

Liability Coverage
Liability is the primary, and usually mandatory, part of auto insurance coverage. Liability coverage saves your personal assets when you’re liable for destroying someone else’s car or injuring someone. Liability is usually quoted as a three-part number like “100/300/50.” That means for any one incident, you’re covered for $100,000 in bodily injury per person, $300,000 in bodily injury total, and $50,000 in property damage. 100/300/50 is the minimum coverage recommended by the auto insurance industry, but requirements vary from state to state. South Carolina, Virginia, Tennessee, New Hampshire, and Wisconsin are five states that do not require liability coverage.

Comprehensive Coverage
Pays for losses from fire, theft, storm, etc. Comprehensive coverage typically covers damage to your insured car not caused by collision (a covered accident with another car). This coverage typically includes, among other things, damage caused by falling objects, fire, theft and vandalism, explosion, earthquake and more.

Collision Coverage
Relates to damage which occur to your own vehicle. This coverage typically pays for damages to your car as a result of a an accident with another car or something else (for example, running into a tree on an icy street). This coverage provides for the repair or replacement of your insured vehicle, up to the Actual Cash Value of the vehicle. Actual Cash Value takes into account depreciation of your car due to age, use, and wear and tear.

Bodily Injury
Pays for injury to others when you are at fault.

Property Damage
Covers property damage when you are at fault.

Medical Expenses
Pays for your own or your passenger’s medical expenses. Medical Payments coverage provides payment for reasonable and necessary medical treatment for bodily injury caused by a covered accident, regardless of who was at fault. That treatment includes, among other things, x-rays, surgery, ambulance, physicians, hospital, and funeral expenses.

Personal Injury Protection
In no-fault states, this covers a broad assortment of medical expenses. This typically provides coverage for an insured person for certain reasonable and necessary expenses. The types of expenses vary by state. Some examples of typical expenses include: medical and hospital expenses, income continuation, loss of services, funeral expenses, and child care expenses for bodily injury caused by a covered accident, regardless of who was at fault. It’s only available in certain states.
Coverage for you if other driver is not insured or is underinsured.

In addition to basic auto insurance, consider these optional services to provide added protection for your vehicle:

Mechanical breakdown Insurance, Emergency Roadside Assistance and Towing Service
When you or your loved ones are stranded and need help, they’re as close as the telephone. With an optional Towing and Road Service, you can reach them 24 hours a day, 365 days a year. It only takes one toll-free call. If you choose a Sign and Drive Road Service, you won’t need a credit card or check to get the help you need.

Car Rental Reimbursement
After a car accident, you may need to rent a car while yours in being repaired. This coverage can usually be bought from your car insurance company. Car rental reimbursement coverage pays a flat sum to assist you with the expenses that you may incur following an auto accident.

Auto Glass Replacement
Auto Glass Replacement is an optional program that takes the headache out of repairing or replacing damaged or broken auto glass. Sometimes included in a comprehensive coverage.

When you purchase insurance for a used car, there are some key factors that you need to consider.

Minimum Liability Coverage

In the United States, each state sets minimum requirements for insurance coverage. In New York State, for example, the minimum requirements for auto insurance coverage are $25,000 per person/$50,000 per incident for injury, $50,000/100,000 for death, and $10,000 for property damage caused by any one accident.[1] Check with your state Department of Motor Vehicles to see what the minimum requirements are where you live.

It’s important to keep in mind that these are the absolute minimum limits required by law. It would be a very good idea to carry more than that in coverage for bodily injury and liability/property damage. If you are the cause of a multiple car accident, or are at fault in an accident where a few people are injured, the costs will add up quickly. The additional premiums that you will pay for more coverage is well worth it, and may pay for itself with one incident.

Comprehensive and Collision Coverage

Another consideration is the deductible amounts that you need to have for your used car. The higher your deductibles, the lower your premium will be for the year — but it also means that you would pay more out of pocket if you have an accident. There are two different kinds of deductibles: comprehensive and collision. Comprehensive coverage pertains to any damage that may be caused by things such as acts of God, hit and run drivers, vandalism, or hitting an animal. Collision comes into play when you actually hit another vehicle while on the road. Comprehensive claims do not change your future premiums for insurance, but collision clams will usually have a negative affect what you pay for car insurance. It often makes sense to have a lower comprehensive deductible, and a higher collision deductible, since comprehensive claims may be smaller. Glass is usually covered under the comprehensive deductible, but some insurance companies may have a $0 deductible for glass coverage. Ask your insurance agent about this.

If Your Used Car is Worth Less than $2000

If your used or older car is worth less than $2000, then you should only carry liability insurance. If you have comprehensive coverage, you may end up paying more for the deductible than the vehicle is worth. Don’t forget about the bodily injury liability coverage, however, as this could cover you if you are at fault in an accident and there are injuries. You cannot simply claim that you don’t have the money to pay for the injuries or property damage, you will be liable for those costs if you have insurance or not. So, make sure your coverage is adequate, even on an older or used car.