3 Steps, 10 Minutes to Auto Insurance Savings

One area where consumers look to save money when times get tough is automobile insurance payments.

Lisa Lobo (pictured below), vice president of personal lines underwriting for The Hartford Financial Services Group in Southington, Connecticut, has some tips on approaches you can take without eliminating critical coverage from your policy to cut costs in the short run.

Step 1: Think Long-term

Most insurance companies think in the long-term, too, and offer additional benefits to consumers who have been customers for a long time.

Before switching carriers, check with your insurance provider to see if there are special savings for which you currently are eligible or might soon qualify.

Try to avoid losing protections that could put you in a financial hole in the event of an accident.

The most dangerous action a consumer can take, Lobo said, is to cancel or fail to purchase insurance coverage.

Step2: Delve into Discounts

Many auto insurance providers offer group plans from employers or through professional associations, business or alumni groups. "Compare apples to apples," Lobo said.

Some companies will give price reductions on policies that are paid in full, rather than monthly installments and some will break up the year into six-month payment intervals.

There also are family discount options when members of a household insure multiple vehicles under a single plan. Once a child comes of driving age or an aging parent or other relative moves into the household, that could have implications for policies. Elderly parents could receive credits for a limited driving status. "You need to make sure there's appropriate levels of coverage," Lobo said, adding that insurance companies must be notified of everyone who could be driving your vehicles.

"Many companies will rate on mileage and usage," she said. "It's going to depend on whether they're a full-time resident or there only six months of the year."

Providers also offer breaks to customers who enroll in plans for multiple products, such as automobile insurance and homeowner's or renter's insurance. "You can get credits for adding your home to the (auto) policy," Lobo said.

Keep carpooling in mind. Drivers who ride with others to and from work can benefit from low-mileage discounts on their policies. "Be considerate of the way yore automobile is being used. For example, for remote workers, maybe the vehicle isn't on the road as much. That's important because carriers use mileage and the way your vehicle is used for rating," Lobo said. "Working from home might change your usage."

Retired persons could be able to change from business use to pleasure use. "That's really where you want to take an assessment," Lobo said.

Consumers should inquire with carriers about other savings categories as well, such as defensive driver discounts, and reductions for hybrid vehicles or safety features such as daytime running lights. "It's making sure your carrier is aware of all the benefits in your vehicle when you bought it or if you've added something on," Lobo said.

Step 3: Pay Wisely

Don't delay in making payments. Late payments lower credit scores, which leads to more expensive rates.

An option for customers facing financial strain is raise the deductible. For example, if your deductible is $250 and you raise it to $500, then the collision and comprehensive coverage premium could be lowered by 15 to 30 percent, while maintaining protection in case of an accident. You should, however, be prepared to pay the higher deductible amount should something happen to the car and you need to make a claim.