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Seven ways to slash your car insurance premium

The weak economy has prompted many of us to seek ways to save money however and whenever we can.

One place to look is your car insurance. From driving less to making a move to keeping your credit history in tip-top shape, things that you’ve already done or things that you can do may result in lower car insurance premiums. Here are seven cost-cutting measures to consider.

1. Driving less, paying less.

According to a survey by the National Association of Insurance Commissioners, about 40 percent of Americans drove less in the past year by telecommuting, carpooling or even walking. If you’re driving less to work — or not driving to work at all — it’s time to check with your car insurer. Driving less could mean paying less for your car insurance.

2. Getting a new set of wheels.

Your car’s make and model affect your premium. So if you’ve traded down or sold a car, be sure to let your agent know. Cars with lower resale values are cheaper to insure in most cases. If you pay off a car, you may be able to raise your deductible or skip optional collision coverage.

3. Making the move.

When you move, you’re required to notify your insurance agent, says Mike Chaney, Mississippi’s insurance commissioner. Depending on where you move, you could save cash. For example, urban areas usually experience more car thefts and accidents than rural areas

Contact your insurance agent before you move. That way, you can find out in advance whether you’ll be pocketing a few extra dollars on your car insurance premium.

4. Raising your deductible.

One common way to cut costs is to raise your deductible — from $250 to $500, for instance.

But if your budget already is severely pinched, think twice before going this route. Chaney’s advice: Review your finances to see whether you have enough to make up for a higher deductible. You don’t want to be in a position where a higher deductible leaves you broke after a car accident or other mishap.

5. Hunting for discounts.

Ask your insurance agent or insurance company whether you qualify for any discounts that you’re not getting now. According to the National Association of Insurance Commissioners, the most common discounts are:

• Logging low annual mileage. The low-mileage number varies from company to company.

• Insuring several vehicles with the same insurance company. Nationwide, for example, offers a multicar discount up to 20 percent.

• Insuring your auto and home with the same company. State Farm offers as much as a 22 percent “multiline” discount if you’ve got more than one kind of insurance with the company.

• Having your car equipped with anti-theft devices, anti-lock brakes and air bags. GEICO, for example, offers up to a 40 percent discount on the collision portion of your coverage your car has air bags.

• Completing a defensive driving course. For California policyholders, GEICO offers a 5 percent discount for completion of an approved course. In states like Florida and Texas, the GEICO discount is 10 percent.

• Maintaining a good driving record. Allstate offers a discount of 45 percent or more to safe drivers.

6. Keeping your credit record clean.

Late or missed bill payments can damage your credit score. That, in turn, can hike your insurance premiums.

Not all states allow credit-based insurance scoring to be used in determining your car insurance rates. Florida, for example, limits its use. While the rules on how and when a company can check your credit history vary by state, generally the company will check when you’re getting a new policy or renewing a current policy.

7. Doing an annual review.

Keep in mind that one of the best things you can do if you’re trying to pinch pennies on your car insurance meeting with your insurance agent at least once a year to go over your coverage. “Some people’s eyes glaze over when they receive their renewal notice in the mail,” says Linda Rey, an agent with Rey Insurance Agency in Sleepy Hollow, N.Y.

But take that mailing as a reminder to meet with your insurance agent. By the way, visiting with your agent via Facebook or Twitter won’t do the trick. Chaney, the Mississippi insurance commissioner, advises you to check in face-to-face. Why? “Insurance is complex and important,” he says.

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