If you drive, you need auto insurance. Most states require that you have some type of insurance policy. The State of Illinois requires that you carry continuous liability coverage which includes bodily injury and property damage to others from an accident you may cause. You must also carry proof of this insurance in your vehicle at all times. This past week I received my insurance renewal policy and bill. Normally, I look at the damage (to my wallet, not vehicle) and write the payment check. This time I decided to review the policy to determine if I could save some money.

There are several things you can do to keep your insurance rates down. Here are a few tips to consider when reviewing your policy:

• Review your deductible. This is where you need to assess your risk tolerance. The higher the deductible, the additional savings you may receive now. If you are in an accident though, you will have to pay a higher amount out-of-pocket before the insurance company pays their amount.
• If you have an older vehicle you may want to drop collision coverage. Collision coverage applies when your vehicle is involved in an accident such as when two vehicles hit each other or when a single vehicle hits a structure. A good rule of thumb is to drop coverage when the annual premium reaches 10% of the vehicle’s value. Keep in mind that if you drop your collision coverage, your insurance company will not pay anything towards fixing your car or replacing it if it is involved in an accident.
• The less you drive, the less your insurance will cost. Discounts are generally given on how much less than 15,000 miles you drive per year. If you carpool or have a short commute, you may save some additional cash.
• It is a good idea to shop insurance companies every 2 -3 years for the best rates and coverage.
• Discounts are often given for good students, car safety features such as airbags and theft deterrent, multiple vehicle coverage, and an accident-free driving record. Ask your agent what types of discounts they offer.
• The type of vehicle you drive, for instance, is something you should consider. Insurance companies know which vehicles are prone to having maintenance problems or likely to be stolen. Check the rates on the vehicles you are interested in buying prior to making a purchase. Here is a link to view the Top Safety Picks for 2012. http://www.iihs.org/ratings/default.aspx
• Some other things that may save money on insurance premiums are your location, age, marital status, credit score and monthly rather than yearly payments.

In reviewing my latest policy, I determined that I could take the risk to increase my deductible on one vehicle based on our driving record and eliminate comprehensive and collision coverage on the second vehicle based on the car’s value. Comprehensive coverage protects you when your vehicle is damaged but not as a result of a collision, such as vandalism or natural disaster. I also shopped insurance companies and looked at the option of paying up front instead of quarterly. That’s a total savings of $384 a year!

When you receive your next policy renewal, take the time to review your policy to verify accurate information and determine if you have an opportunity to save some money based on your needs and risk tolerance.