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How can I reduce my auto insurance bill?

Insurers usually base their auto insurance rates on criteria such as your age, driving record, and the type of car you drive. Rates vary from company to company, however, so a good way to save money is to shop around--you may find that another insurer offers the same coverage at a lower rate.

Some of your coverages may be subject to deductibles (money you must pay before your insurance kicks in). Raising your deductibles can also help you save money. For the most part, the higher your deductibles, the lower your premiums. Before you raise a deductible, though, you'll want to be sure you can cover the out-of-pocket expense should an accident occur. Are you more concerned with lower premiums or full insurance coverage?

Many insurance companies offer credits or discounts. For example, an insurer might provide discounts to those who have safe driving records or to those who insure more than one car with them. Check to see what types of credits and discounts your insurer offers.

To save money, you may also want to rethink your optional coverages. For example, if you have an older car in poor condition, it may make sense to drop your collision and comprehensive coverage if possible. A claim paid by your insurance company on such a car may be minimal and might not even exceed what you'd pay in premiums and deductibles.