Looks like there's about to be another drain on your wallet. Two of the biggest auto insurers are looking to raise premiums in about 20 states and the other insurance companies will likely follow. The premium increase comes about after two years of price reductions.

The insurers are looking to increase costs due to rising repair costs and rising medical costs resulting from injuries from automobile accidents.

How can you minimize the impact to your wallet?

Shop around. Shopping for insurance is about as exciting as going to the dentist. Unfortunately, just like having healthy teeth and gums, shopping for the best rate is necessary for having a healthy wallet. Don't want to waste time completing multiple insurance quotes? Consider using a site like InsureMe.com to fill out one single form and will submit your information to multiple carriers. You can then view the quotes for different companies side-by-side.

Review Coverage. Are you paying for coverage you don't need? Do you have an older vehicle that's paid for? Do you really need to carry Comprehensive and/or Collision coverage? If you feel that you do need comp and/or collision coverage, consider choosing the highest deductible you can afford.

Maintain your credit. 92 out of 100 companies polled in a recent survey by the research firm Conning & Company use your credit score to determine whether to issue a policy on your car and/or home and at what premium. Insurance is based on risk and many insurers feel that if you've been irresponsible with your credit, you will not only file more claims; but more expensive claims. Not sure where to check your credit? Consider using a service like Equifax 3-in-1 Credit Watch Service or Suze Orman's Fico Kit Platinum.

Take a few minutes out of your busy day to shop around for your auto insurance; you could save a boatload of money.

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  1. "Future Millionaire" // February 21, 2008 at 11:16 PM  

    Another way to lower your payments is to really review what coverage you need and raise your deductible. Both of these are only valid if your situation is right and you have sufficient savings.

    I have an extremely high deductible($1,000) because I have an emergency fund and other liquid savings that could cover little incidents, like chipping my windshield or needing my bumper fixed. I would only need my insurance if I had a major catastrophic event.

    Also I have dropped collision and comprehensive on my car since it is getting old and in a worst case scenario I could replace my car for the amount I'm saving in insurance premiums over the next few years. I have insurance for if I were to hit other peoples cars (especially a nice new $60k BMW etc).

    I think of car insurance like renters or home owners insurance, I wouldn't use it if I got nick in my wall, but I want to pay for it for cases where it would mean financial ruin like the place burning down.

  2. Daizy // February 21, 2008 at 11:42 PM  

    I called Geico and Progressive last year. Geico quoted lower general prices than State Farm, who I am with, but later, when they actually told me what I would be paying, it was more than State Farm. They said it was because of my zip code and the proximity to Mexico. High rate of auto thefts. Plus I had a multi policy discount since my house was with State Farm too. Now that my house has changed to a rental, I don't get the discount. Geico and State Farm are about equal for liability.

  3. Anonymous // February 22, 2008 at 11:32 AM  

    I actually just did this a couple of weeks ago. We had switched from Progressive to Geico a few years back due to lower rates, but when I saw a rate increase with the latest renewal, I started looking again. I saved about $100 on a 6 month renewal by switching to AIG.

    As you mentioned in your post, I just happened across a site called the Insurance Answer Center (Answerfinancial.com)where I completed one application and got rates for half a dozen or more different providers. I also tried out Esurance which, like Progressive's site, shows you their rate and the rate of 3-4 competitor's. Both sites showed AIGdirect as the best rate for us.

    The only downside to this approach is the spam that will flood your inbox from all the companies tied to these sites. It only lasted a couple of days, though, and I got a good deal. So, in my mind, it was worth it. :)

  4. Anonymous // May 26, 2008 at 1:10 PM  

    it is important to change mind set which may potentially save people a lot of money. There has been a common attitude of "I want it all and I want it all now" Well money should never be spent unless it can be paid back. Why continually spend with what is not yours?