5 Things You Can Do to Lower Your Auto Insurance Rates

One sure-fire way to save money is to increase the deductible. That's the amount a person pays before their insurance kicks in. For example, many years ago, I pulled into my mother's driveway at 2 a.m. and slammed into her statue of the Virgin Mary, which was shrouded in a grotto of rocks. Yes, I'm going to hell, but worse, I did $1,000 worth of damage to my baby -- the Mad Mustang. I stupidly tried to back off the rocks. My deductible was $500. Insurance paid for the balance.

By increasing your deductible to a princelier sum, your insurance premium will drop. That's because you're assuming a larger share of the financial responsibility [source: Car Insurance Rates] Think twice before increasing your deductible. Make sure you can afford the additional money. Also, consider your driving record. If you are accident-prone, it's probably not a good idea to increase your deductible [source: Car Insurance Rates].

If you ever see a Ferrari or a Porsche motoring down the road, chances are the owner is paying out the you-know-what for auto insurance coverage. That's because such high-profile cars are more expensive to repair and popular with thieves. Think about it for a second: When you were a teenager, what was your first car? My cousin had a 1976 Cutlass, which was cheaper to insure than my brand-new Mustang. So, if you want to save some dough, forget the Ferrari and buy a Taurus. Also, before buying a new car, research the cost of insuring the vehicle.

If you own a home, then combining auto insurance with homeowner's insurance can save you money. Most companies will give you a 10 percent discount on your entire policy. I get a 20 percent discount for having all my insurance with the same company. Ten or 20 percent doesn't seem like a lot, but as the years tick buy, it adds up. The key is to ask, because you never know how much cash you can save.

Don't you hate paying for the same thing twice? If Personal Injury Protection, also known as PIP, is part of your auto insurance policy, you might be paying twice for the same coverage. PIP coverage pays medical expenses for the insured driver after an auto accident. Some states, mostly those with "no-fault" insurance, require drivers to purchase PIP as part of their coverage [source Cheap Oklahoma Auto Insurance].

Some PIP plans not only cover your medical and hospital expenses, but they can also help you pay bills, such as child-care expenses, while you're laid up. However, if you live in a state that does not require PIP insurance, and if you have good health, life and disability insurance coverage, then you probably don't need supplemental PIP coverage with your auto policy.

One of the questions an insurance agent will ask when you apply for

is "how many miles do you drive?" Do you know? I certainly don't. Maybe we both should start counting the miles. Those that drive less, pay less. The logic is simple: The less you drive, the less likely you are to get in an accident.

Some companies offer drivers a 50 percent discount if they drive fewer miles. Fifty percent is an awesome savings, but it comes at a price. Big Brother is along for the ride. The insurance company will probably want to install a mileage tracking device in your car. Such devices not only track how many miles you drive, but also how fast you're motoring through town, and whether you drive mostly at night or in the day. You might even have to pay a charge each month for the device [source: Fuscaldo].

Others offer customers a discount of up to 35 percent for those with a GM car equipped with OnStar Vehicle Diagnostics. If you have OnStar and drive less than 15,000 miles a year, you may qualify for the GMAC low-mileage discount. In addition, some companies offer pay-as-you-go insurance to give those who drive less than 15,000 miles a year a huge discount. The plan is meant for people such as city-dwellers who use public transportation, the elderly who don't drive a lot and someone who works from home (I just learned something new, today) [source: MSN].

Anyway, at the end of the day, the key to saving is to do you research, ask questions and shop around.