6 best ways to save money on auto insurance

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6 best ways to save money on auto insurance

Paying that monthly auto insurance bill is never fun. You have probably thought about shopping around for lower rates, but life gets in the way and you end up just paying the bill.

What you don't typically consider is that, with a little homework, you may be able to lower your insurance costs by taking advantage of these money-saving tips. So, as much as you don't want to shop around or call your insurance company to ask about lower rates, it might be worth it if any of these discounts apply to you:

6 ways to save money on auto insurance

Bundled policies

Many insurance carriers offer discounts for bundling together two policies, like homeowners or renters insurance with your auto policy.

"If you live in an apartment and buy cheap tenant insurance, this can save you a ton of money on your auto insurance," says Aimee Goddard, vice president of Natick, Ma.-based insurance agency Eastern Insurance Group.

A renter's policy that costs $150 a year in Massachusetts, for example, could save you $500 on your annual auto insurance, says Goddard.

To entice people to sign up for both policies, Arbella Insurance rolled out its "carpartment" twofer in 2013 to Massachusetts and Connecticut residents. According to Arbella, "when you sign up for car insurance, we'll throw in a side of renters insurance for as low as $3 a week. That's less than a latte even without the caramel shot."

Go back to school

Just when you thought your school days were over, you might want to think again as teenagers aren't the only ones who earn insurance discounts by taking driver's education courses.

Many states offer lower rates to those who take defensive driving courses. In New York, for example, if you complete a defensive driving course after you start driving an insured vehicle, you're eligible for a 10% base rate reduction on your liability and collision insurance for up to three years.

Not all states, however, offer these courses, and discounts vary state to state. Check with your insurance company or state department of motor vehicles to see if these courses are available to you.

Join the club

Some insurance companies offer discounted rates if you belong to a particular organization or if you work for a certain company. Lowe's employees, for example, can save an average of $486 annually by purchasing insurance through MetLife. And, Mapfre Insurance in Massachusetts offers a 10% savings on Massachusetts insurance if you're a member of the Automobile Club.

Geico, Liberty Mutual, and other insurers also offer discounts to members of various associations and organizations.

Pay in full

Not everyone can afford to pay several months of insurance bills at the same time. But, if you can swing one payment for the entire premium for a six month period, you may be able to save money with a pay in full discount. The savings vary depending on the insurance company and where you live.

Allstate, for example, offers a 10% pay in full discount and Arbella offers a three percent discount.

Vehicle equipment savings

Does your car have airbags, an anti-lock brake system, daytime running lights, or an anti-theft system? If so, your insurance company may provide vehicle equipment discounts.

Get rewarded for your overseas good driving record

Although most drivers with good driving records are already receiving good driver discounts, you could be one of those who is paying a needlessly high rate.

Say, for example, that you moved to the U.S. for a job. You may appear as a new driver in this country, yet you've been driving for years in your home country. Many insurance companies will quote you higher new driver rates based solely on your short driving record in the U.S. But, you can get around this by providing your insurance carrier with a copy of your good driving record from your country, says Goddard, who often insures high-tech employees from overseas.

"Most people don't think about moving here with their driving record but if we have that, we'll quote you as an experienced driver which can save you money," says Goddard.

Photo credit: Kai Schreiber