I don't particularly enjoy paying for auto insurance…or any insurance, for that matter. About the only time I appreciate it is when I need to use it for reimbursement. But that isn’t the moment I want to discover I've been paying for coverage I don't actually have, or paying extra for coverage that isn't going to help. This is why it can pay off to sit down and read your policy when it arrives, and to read carefully through each renewal policy from year to year. Learn about hidden car insurance you need to know about that can save you money.

Note: While your auto insurance agent may be happy enough to discuss these savings with you, it is unlikely they will bring up the subject unless you know enough to ask!

1. Compare your policy against state minimums

While in certain areas—for instance, in personal injury liability—it may be wise to pay for more coverage than the minimum (especially if your coverage includes a beginning driver)—those state-set minimums are there for a reason. However, in many respects, paying more than the minimum could mean wasting funds better spent in other areas.

2. Carry all insurance policies under a single insurer

I get a 10% discount on my policies by carrying both my car insurance and renter's insurance with the same company. So that’s $44 I save on renter's insurance and $190 I save on auto insurance = $234 per year in savings. I'll take it! If you currently have policies with different carriers, ask each what kind of discount you get for switching at your next renewal term…then choose the one that offers the best deal.

  • Typical nationwide discount by combining policies under one insurer: 10-20%

3. Look closely for redundancies

Recently I discovered that my auto insurance policy includes roadside assistance. So it’s important to scout out those "little extras" that come as lesser-advertised perks with your policy so you don't pay for them twice!

  • Example of savings: I just discovered my auto insurance policy includes roadside assistance. Great news, except that I've also been paying for a separate AAA roadside assistance policy for the past three years ($52 per year x 3 years = $156 extra dollars I've paid out for redundant benefits.) 

4. Adjust anything you can adjust

If you’re on a budget and your new insurance policy exceeds what you can or are willing to pay, look at what you can adjust.

Here are some common areas where it’s relatively safe to adjust levels:

  • Deductible: Adjusting your deductible is probably the number one way to change what you pay annually. Here, you can expect to save anywhere from 15% to as much as 40% depending on how much you adjust your deductible.
  • Car rental: If you can, either lower the daily reimbursement amount for a rental car (if your car needs covered work) or drop this coverage. You may only save $40 or $50 per year, but in some cases it’s worth it…especially if you own a second vehicle.
  • Comprehensive: If you have an older vehicle, it may not make financial sense to carry comprehensive as well as collision coverage. Experts say that if your vehicle is worth less than $1,000, comprehensive coverage should be dropped.

5. Don't claim everything

If you can afford to pay out-of-pocket for smaller claim items, you may actually end up saving yourself money when your policy renews. To decide, find out how your insurer treats different claims. You may not be faced with a higher premium for damage due to storms, but you likely will for collisions, whether or not you were at fault.

6. Get all your discounts

There are many types of discounts insurers can offer as incentives. Some are simply "loyalty" incentives whereas others are sincere efforts to pay out less in insurance claims. Typically insurers will limit the number or type of discounts that can be applied to a single policy—otherwise, after applying every discount, your policy would be free (great for you, but not so ideal for the insurer).

  • Employer discounts: Ask if your employer has a contract with certain insurers and find out what the negotiated benefits are.
  • Occupational discounts: Teachers, military families, nurses, physicians, police personnel, and others are common occupations that can cash in on discounts.
  • Limited-use discounts: While not technically a discount, if you work from home or only drive during limited hours or days, you could end up paying less in auto insurance just for mentioning this (Note: limited-use discounts can also help you lower the cost of insuring teen drivers).
  • Good credit discounts: If your credit is amazing, mention it. Some insurers equate high credit scores with better driving habits, and offer discounts to customers who maintain high credit scores over time (Note: this type of discount often extends to any policy with that insurer).
  • Association discounts: Also often called "affinity discounts," some associations and memberships may include a discount by choosing certain insurers. Greek organizations, service organizations, partner organizations, and professional organizations often offer these negotiated in-network perks to members.
  • Payment discounts: Increasingly, insurers who want to be perceived as "green friendly" are offering discounts to customers who choose paperless statements. More traditionally, most insurers offer discounts to customers who pay annually (versus monthly) or via auto-draft monthly (or both).
  • Pre-renewal discounts: If you decide to switch insurers before your policy is technically up for renewal, you could save as much as 10% with some insurers. Experts advise to begin shopping 2-4 weeks before your policy is set to renew to get the best offers.
  • Low-mileage discounts: If your car has low mileage for its age, you may be eligible for what is called a "low-mileage discount," which reflects the relative safety of your vehicle for its class. You could get as much as an 11% discount.
  • Keep your grades up: If you are in school and get high marks, make sure your insurer knows it. National averages indicate that, like good credit, insurers factor in grades to estimate safe driving habits—to the tune of as much as a 16% discount!