Auto insurance companies fill your mailbox and your TV screen with ads promising to save you hundreds of dollars a year on auto insurance? The easy way to cut through the hype and figure out how much you can save by switching insurance companies.

Shop around to save money on car insurance

Depending on where you live in the country, your auto insurance rates may be double another state.  If you’ve received a ticket or been in a car accident, you’ll pay even more. If your credit is poor, the rates are going up again. Auto insurance can be expensive especially if you have blemishes on your driving record or credit. Insurance companies do check your credit and can base your rates on it.

With so many factors affecting the rate you pay for car insurance, it’s important to shop around.

See if your state Insurance Commissioner offers a premium calculator. This gives you a ballpark figure for policy prices based on information insurance companies provide to the Insurance Commissioner. It lists the prices by company. Don’t just pick the cheapest company. Check their complaint history. You want to make sure you are getting good value for your money and that your policy will be paid without much headache if there is a problem.

When you’re shopping around, don’t provide the agent with your Social Security Number. Here’s why they don’t need it, and you shouldn’t provide that information.

Ask for discounts

Insurance companies offer discounts for good credit, good grades, low mileage, defensive driving class, airbags, no accidents, having a home and auto policy with the same carrier, and alarm systems. Options vary by insurance company, but ask to make sure you are getting all the discounts.

Raise or lower the deductible

Figure out the amount you want for your deductible. This can impact the price you’ll pay for your premium. I think a $250 deductible is the safest one, but if money is tight and you’re willing to take that risk you can increase the deductible to save money in the short-term. Just understand it could cost you money in the long-term if you have an accident or need to file a claim.

Rental Car coverage

I think it’s a good idea to add rental coverage to your policy. It won’t cost you that much. I don’t think I’ve ever paid more than $20 for a six-month premium. That’s insignificant in comparison to the cost you would pay if you need a rental car. Most rental car companies charge $30 a day, so that coverage pays for itself. There is usually a cap on the rental car. They won’t let you keep it for months, but it’s usually enough to get you through a repair.

Read the policy

Ask for a declarations page before you sign the policy. This will break down all your coverage. Also, check with your state Insurance Commissioner if you need help understand the terms and policy.
Ohio Guide to Automobile Insurance
Kansas Auto Insurance Shoppers Guide

Research the company with your state

Check with your state’s Insurance Commissioner to see how the company you want to hire fares with customers. It will list the number of complaints for each company and the complaint ratio based on the number of customers served by that company.

Ohio Customer Complaint Ratios

Missouri Complaint database

You can also search for complaints and financial history with the National Association of Insurance Commissioners Information Source. For example, Kansas refers you right to the NAIC database.