Low-cost automobile insurance isn't just a vague theory; a little effort on your part can result in lower premiums, sometimes with even more coverage.

As with managing your investments and credit rating, staying on top of your automobile insurance can pay off in a big way with lower premiums.

Forget all the television hype about saving hundreds of dollars just by changing insurance companies. Is it really possible that everyone will save big bucks by moving from one company to the next, and then to the next? Wouldn't that mean, then, that there's one company that's the cheapest for everyone? Not necessarily.

Although insurance providers set rates based on averages and probabilities, they don't treat every insured driver equally. Getting a cheaper insurance rate often depends on an individual's needs, driving history, credit health and so forth. Yes, you might get a lower premium by moving from your current insurer to another company, but that doesn't mean your neighbor will.

As a savvy consumer, it's up to you to do the research and take the steps necessary to get the absolute best coverage at the lowest rate possible.

Here are some tips for lowering your vehicle insurance costs:

Review your policy annually. Because insurance companies do base their rates on averages and probabilities, how they assess you as a risk can change from year to year. That's reason enough to go online and compare rates. Even if you did this a year ago and believe you found the best deal at the time, that doesn't ensure that it is still the best deal out there.

Kim Lankford is the "Ask Kim" insurance adviser at Kiplinger's. She said everyone should shop around from time to time just to stay abreast of what's out there. "You can get some good ideas just by going to different insurances sites and checking prices," she added.

Review your policy with any life change. Changing employers, relocating, getting married, adding a teenage driver, retiring, buying a new car and so forth should signal you to alert your insurance agent to the change, request an update to your current policy and compare costs with other insurance companies.

Changing employers and relocating can alter the number of miles in your daily commute. Obviously retirement would end that commute entirely. Each insurance company has its own mileage threshold at which your premium is affected.

If you are 25 years old or younger, getting married can reduce your premium with some insurers.

Adding a teenage driver to your policy is, perhaps, the single most important motivator for doing some price comparisons, according to Lankford. Some insurers treat teen drivers differently than others. "A teenage girl can increase premiums by 50%, in some cases, and adding a teenage boy can double the price," Lankford said.

Buying a new car presents the ideal time to shop around. Different insurance carriers evaluate the potential risk of various cars differently. Once you know what your current insurance company will charge for a car you are considering, check out the cost with some other carriers.

Review your insurance company's available discounts. Every insurance company offers a list of discounts. It's up to you to stay current with the discounts offered and to request the ones you qualify for.

Most publish their list online. GEICO, for example, lists 16 different vehicle insurance discounts on its Web site www.geico.com. Although the discounts available vary from state to state, it gives price breaks for everything from safety features on your car, such as anti-lock brakes and daytime running lights, to a five-year clean driving history, defensive driving courses, and, in some cases, even just renewing your policy.

Bundle your various insurance policies with one insurer. Keeping all of your insurance business with the same insurance company can earn you big savings. This is true whether it's bundling multiple cars, or bundling policies for cars, homeowners, RVs and so on.

Here's something else to consider: If you're married with multiple vehicles, you and your spouse might not be insured to drive one another's vehicles unless they're covered under the same policy.

Increase your deductible. The deductible is the set amount you pay out of pocket when your insurance company pays a claim. A low deductible costs the insured more than a high deductible because the insurance company reasons that with a low deductible, the insured will file more damage claims. With a $250 deductible, the insured will be tempted to file a claim for any loss over $250. With a $1,000 deductible, the insured can't file for a loss below that amount.

Lankford said that beyond significantly lowering premiums, raising the deductible to at least $1,000 can help maintain the claim-free discount that many insurance companies offer.

Drop your collision and comprehensive coverage. There's little reason to insure a car that's worth only slightly more than your policy's deductible. If you have a car that's paid for, go to NADA.com or KBB.com and research its market value. It's possible you're paying more in annual premiums than the insurance company will pay you in the event of a total loss. If so, save yourself a few bucks by dropping the collision and comprehensive coverage.

Review your credit score. Yes, your credit can influence the amount of your annual premium. Some companies will give you as much as a 50 percent discount for good credit.

Why? Two reasons: Insured individuals with financial problems are more likely to file damage claims; and, if a person has difficulty paying other bills, chances are good he will have trouble paying his insurance premiums.

If your credit score has improved significantly since your insurance policy was issued, check with your carrier to determine if a good-credit discount is available. If not, it's another reason to shop around.

author photo

Russ Heaps began covering the automotive industry in 1986, first overseeing the automotive pages of the Boca Raton News and then the Palm Beach Post in Florida. In 2001 he became managing editor of AMI Auto Week and NOPI Street Performance Compact magazines. Since leaving AMI he has freelanced his auto reviews and industry analysis to the Washington Times, Hispanic magazine, Journal-Register Newspapers, Bankrate.com, MyCarData.com, Interest.com, and others. He resides in Greenville, SC.

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