4 Savvy Strategies for Securing Car Insurance Discounts

Despite the zany antics of lovable car insurance TV spokespersons like LiMu Emu and the Geico Gecko®, paying for car insurance is no one's idea of a good time. If you're looking for a little breathing room in your budget, car insurance discounts can be a great way to save money.

Let's look at a few clever strategies for how to save money on car insurance -- while managing your financial risks.

1. Make your car a lower risk for car insurance companies

Insurance companies are in the business of managing risk. They want to make sure that they get paid enough money from insurance premiums to cover the possible costs of insurance claims, with some money left over for profit. If you want car insurance discounts, the best way to do this is to show your insurance company that you are a low risk driver who will (ideally) not cost them a bunch of money.

How to prove that you're a lower risk driver? There are a few easy ways, according to Tyler Grizzle, Partner with GSP Insurance Group. "If you want to snag discounts, here's the deal," said Tyler. "Keep your driving record clean, kit out your car with some safety bells and whistles, or maybe take a driving course."

Many insurance companies offer discounts to safe drivers, to those with cars that are equipped with the latest safety features and anti-theft systems, and to people who complete a company-approved defensive driving course. For example, State Farm offers a unique program for young drivers under the age of 25 called Steer Clear® that teaches safe driving skills. After finishing the class, drivers can qualify for special car insurance discounts.

Reducing the cost of your car insurance starts by showing your insurance company that you're trying to reduce its cost of doing business.

2. Be a better customer for your insurance company

To paraphrase a famous quote from President John F. Kennedy: "Ask not what your insurance company can do for you; ask what you can do for your insurance company."

In the same way that airlines provide special benefits to customers that have elite status, insurance companies also offer perks to their most loyal customers. But instead of racking up frequent flyer miles, all you have to do is bundle your insurance policies.

"Bundling your car and home insurance can save you some bucks," said Tyler Grizzle. "And don't just rely on websites. A quick call to insurers might reveal some hidden gems of deals."

Insurance companies love to sell more insurance to their existing customers, because it's easier and cheaper than finding new customers. If you can put more of your insurance policies with one company, it's a win-win situation. You get the convenience of having all your insurance in one place, and your insurance company gets a more lucrative and loyal customer. And the best insurance companies will reward your loyalty with a multi-policy discount.

3. Reduce your coverage -- and your insurance company's possible costs

Along with being a more loyal customer to your insurance company, you can make its business stronger by reducing its possible costs. That means: strategically reducing your coverage amounts, or carefully raising your deductible. The less money you ask your insurance company to pay in case of a car accident, the more money you can save on insurance premiums.

One way to do this is to cut back on optional coverages. Dig into the fine print of your policy and see if you're paying for too much coverage on things that you wouldn't mind paying for out of pocket. "It's time to play the policy detective, and see if you can ditch some of the fluff in your coverage," said Tyler Grizzle.

Some optional coverages that you might want to consider cutting include:

• Rental car reimbursement: In case your car gets into a bad crash and is in the shop for weeks, do you have other options for a long-term vehicle? If you can borrow a car from family, carpool with friends, or get by on foot, by bike, or with public transit, you might feel comfortable ditching this coverage.
• Gap coverage: Depending on the current fair market value of your vehicle and how much you owe on an auto loan, gap coverage might not be a good enough deal.
• Roadside assistance: If you're paying extra for roadside assistance, you might consider ditching this coverage too. Most people have mobile phones nowadays and it's easy to look up a towing company by yourself; or you can get roadside assistance in other ways, like a AAA membership.

But be careful: if you cut back too far on your car insurance coverage, you could end up having to pay a lot of money out of pocket in case of a crash. Make sure you have liability car insurance coverage that meets your state's required minimums. And before you start trying to save money on car insurance premiums, it's a good idea to build up an emergency savings fund so you have cash on hand for future fender benders.

4. Ask your insurer for surprising group discounts

Some car insurance companies offer discounts not only based on how you drive, but on which groups you belong to. Samuel Greenes, Professional Insurance Broker and founder of BLUE Insurance, says, "To get some unique deals, ask your insurer about occupational, academic, affinity group, and loyalty membership discounts."

For example, Geico offers membership discounts to members of hundreds of partner organizations, such as college and university alumni associations, business and professional organizations, or fraternities and sororities.

It pays to stay in touch with your alma mater and get involved with professional organizations. Along with lifelong friends and career networking, being a joiner can even help you save on car insurance.

Getting car insurance discounts is often a matter of thinking about the deal from your insurance company's perspective. They will give you discounts if you can show that you're a more loyal customer or a lower-risk driver. But before you cut your coverages or raise your deductible, make sure you're financially stable enough to cover the cost of out-of-pocket expenses in case of a crash. Don't get so busy reducing your insurance company's risks that you forget to take care of yourself.