Car insuranceAuto insurance is one of the most widespread necessary evils; as it is required by law and pricing is not in your control. I spent one year from 2007-2008 working for one of the large insurance carriers in the United States, and I had to get out. I’m not intending to write a missive or expose on the industry, but I will note that I have an increased awareness of how insurance and the claims process work, and why people dislike insurance companies. While pricing is set by the company, there are some things to consider to reduce the cost of premiums and to get the full value of paying your insurance agent.

Discounts: Almost all auto insurance companies offer multi-level discounts for anything from good grades, if you have a student driver, to anti-lock brakes on your vehicle. I have even seen discounts for having children under the age of 7. Also, if you drive less than the average mileage per year, which is approximately 10,000 miles, you may qualify for a discount. Insurance companies are not always forthright with the discounts they offer, so make sure to ask your agent or research on the company’s website.

Safe driving: Drive defensively, not aggressively. Insurance companies offer generous discounts for a clean driving record. I have seen rates drop as much as 50% for no accidents, citations, or claims. If you are age 55 or over, take a senior defensive driving course, which may lead you to a discount as well.

Increase your deductible: The deductible is the amount you pay first as the insured in the event of a claim before the insurance company steps in. The standard deductible amount is $500. Depending your comfort level some people opt for as low as a $200 deductible or as high as $2500. Raising the deductible from $500 to $750, the rate can drop as much as 40%. However, the caveat is that you should have money set aside for the deductible in the event of an accident.

Vehicle’s worth: In the event of a total loss on a vehicle, an insurance company will pay market value of the vehicle if it was to be replaced. Cars depreciate rapidly, and if your vehicle is 15 years or older or worth less than $2,000, then you may be overinsuring your car. If your car is worth less than the deductible, you are probably paying too much. Before making any changes to collision and comprehensive coverages, check with your agency and your state for minimum coverage requirements.