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4 Ways to Save Money on Auto Insurance

If you own a car, you are legally required to have auto insurance. Since most of us own a car, paying for auto insurance is just as automatic as paying for electric, water, or cable TV. When money gets tight, though, we all start looking for ways to save money. We reduce our cable package, buy CFL light bulbs, and turn off the water while we brush our teeth. All these things can add up to $100 or more saved every month. I would like to add another way to save money to your list: save money on auto insurance.

Auto insurance policies can cost anywhere from $50 to $250 per month, depending on the type of car you drive and the amount of coverage you have on that car. Newer cars, fast cars and 4-wheel drive trucks all cost more to insure. Older cars and 4-door sedan models typically have cheaper policies.

The reasons for this are fairly transparent. Newer cars typically cost more to repair than older models. You are more likely do something reckless in a sports car or 4-wheel drive. Four door sedans are usually family style cars, so the auto insurance company assumes you will drive more responsibly.

On average, married men pay less for insurance than their single counter-parts. Again, the auto insurance company assumes married men will drive more responsibly.

You can't really change your age and marital status overnight, but there are a few other ways you can effectively save some money on your auto insurance. Following are 4 proven tips you can use to save some money each month.

Tip 1 — Traffic School

When you get a ticket for speeding or are faulted for an accident, the DMV will add “points” to your license. A minor speeding ticket will usually add 2-3 points; a reckless driving violation can cause as many as 6 points to be added to your license. If you have too many points added to your license, the DMV will suspend your license.

Visit your state's DMV website to find out more about the Traffic Violation Point System within your state. There you will find information regarding the number of points each violation carries, how long points stay on your license, and the maximum number of points you can acrue before your license is suspended.

Auto insurance companies are made aware when points have been added to your license. Consequently, they usually adjust your premium to reflect the infraction.

Luckily, when you receive a ticket, most states give you the option of attending a traffic school class that will prevent points from being added to your license. Classes are either 4 or 8 hours in length, with the 8 hour courses being required to keep more serious violations from appearing on your record. These classes are usually offered online, so you can take it from the comfort of your living room. The down side is the lessons are timed, so it really does take 4 or 8 hours to complete the course. A 4-hour class usually costs $90-$100.

If you recently had some tickets or accidents added to your record, you could invest a little time into a traffic school class and have some of those points removed from your license early. I recommend you contact your auto insurance provider and ask them what adjustments could be made to your premium if you complete a 4 or 8 hour Traffic School class.

Tip 2 — Shop Around

The most obvious way to save money on auto insurance is the time honored tradition of shopping around for the best rate. Getting quotes from a few different insurance providers will help ensure that you are getting the best possible rate.

In today's digital age, you can easily get a few quotes online. Many auto insurance providers offer online quotes: Progressive, Allstate, eSurance and Geico are probably the biggest four online providers.

If you decide to get online quotes, be prepared to spend 10-15 minutes on each provider's website. The quote process begins with a series of questions about your marital status, your driving history, what kind of vehicle you want to insure and how much you drive the vehicle. Once you have answered all the questions, you will be given a quote.

Some auto insurance providers will have a local agent call you a few days after the quote. The agent will ask how their price compared to your current provider and usually let you know they can work with the policy details to save you some more money. Which leads me to the next tip…

Tip 3 — Adjust your Coverage

There are adjustments you can make to your policy to reduce your payment. Through my provider's website, I can make adjustments to my policy with the click of a few buttons. The most common adjustment is to raise your deductible(s). You can also adjust the amount of coverage you carry for personal injury protection, property damage, medical payments, etc.

Most states have laws regarding the minimum amount of coverage you can have for each category, and you should carry as much insurance as you can afford. I recommend speaking to your insurance agent if you consider making changes to your policy.

Tip 4 — Ask for Discounts

Many auto insurance providers offer discounts for a variety of things. If you're in school, see if you can get a discount for your grades. If you you're record is clean, ask if you are eligible for a preferred driver discount.

Most providers will also give you a discount for insuring yourself and your spouse on the same policy. You may also receive a discount for bundling your auto, home and life insurance policies together. Talk with your insurance provider to see what kind of adjustments can be made to save you some money.