Ask About Discounts

One of the first steps to reducing your car insurance premiums is simply asking. Before getting new insurance quotes from other insurance companies, start by making sure you're getting the best possible premiums from your current insurer.

Almost all insurance companies offer at least a handful of discounts -- but you probably won't know about them if you don't ask. These discounts can save you anywhere from 5% to 35% on your premiums and you likely qualify for at least a couple.

Some discounts are available to people with certain professions, such as nurses, teachers, and first responders. Even being a senior and/or being retired can earn you a discount. Many companies offer discounts for seniors starting around age 50 and these discounts often increase every 5 years. Make sure you tell your insurance provider when you retire, too; because you won't be commuting to work and your risk of an accident is lower, your insurance rates probably will be as well.

You can also get a discount on car insurance by joining a group like AAA or AARP. These groups offer access to affinity group discounts that can lower your premiums by 5-10%.

Other discounts you may qualify for include:

• Low mileage discount
• Multi-line discount if you have several policies with the same insurance company
• Multi-vehicle discount
• Payment in full discount for paying your entire annual premium at once
• Defensive driving discount for taking a class to brush up on your skills. These classes usually cost less than $20.
• Safe diver discount for maintaining a clean driving record.
• Green vehicle discount for driving a hybrid or electric car.

Raise Your Deductibles

One of the biggest factors influencing your car insurance price is the amount of your deductibles. The higher your deductibles, the more money you can save. You may save hundreds per year by raising your deductible from $500 to $1,000.

Before increasing your deductible, make sure it's an amount you can affod if you get into an accident and need to make a claim. After all, what's the point of saving $20 per month if you can't afford the $1,000 deductible when you need your policy.

To make sure increasing your deductible makes sense, calculate how long it takes for the saving to pay for the difference in your deductible. With $20 monthly savings, it would take over 24 months to pay for the difference between a $1,000 and a $500 deductible.

Review Your Coverage and Limits

Don't pay for coverage you don't even need. The most crucial type of coverage is liability coverage which pays for damages, injuries, and legal costs if you cause an accident. It's definitely worthwhile to choose liability limits well above your state's minimum.

Look at other types of coverage you may have and ask yourself if you really need them and if you have appropriate limits. For example, rental car coverage is an unnecessary expense if you have a second vehicle you can use if yours needs to go to the shop. Roadside assistance can be skipped if you get coverage through an auto club or car warranty. You can even skip medical payments coverage if you don't usually drive with passengers and you have great health insurance.

Check the value of your vehicle to determine if it's worth it to pay for collision and comprehensive coverage. This type of coverage pays out to repair or replace your car if it's stolen or damaged. However, the maximum payout will be limited by your vehicle's current value minus the deductible. You may want to drop full coverage if your car is worth less than the annual deductible or 10x the extra premium you will pay.

Shop Carefully When Buying a New Car

The vehicle you drive definitely plays a major role in determining your car insurance premium. Auto insurance rates can vary a great deal depending on the type of vehicle, its safety rating, the cost to repair or replace the vehicle, and theft rate. The cheapest vehicles to insure are usually great at protecting people in an accident, don't cost too much to repair, and are usually driven by experienced, safe drivers.

Examples of vehicles that tend to be very affordable to insure include:

• Jeep Compass
• Jeep Wrangler
• Honda Odyssey
• Honda Fit
• Subaru Outback
• Subaru Forester
• Mazda CX-3
• Chevrolet Traverse

Maintain Good Credit

Good credit isn't just for the young. Even as you enter retirement, your credit score still matters, even with a paid-off home and car. Your credit score doesn't just affect your ability to qualify for credit and loan products; in most states, it can also be used to determine your car insurance rates.

On average, people with poor credit pay more for car insurance than people with good to excellent credit. That's because credit-based insurance scores have been found to be effective predictors of risk. Keep in mind car insurance companies don't use traditional credit scores like banks. Instead, they create their own scores based on Experian or FICO scores with their own scoring model.

To maintain a good credit score and keep your car insurance premiums low, follow these tips in retirement:

• Keep and use a credit card. A TransUnion study found that one-third of seniors report reducing their use of credit cards. This can be a problem because it can prompt the closure of your accounts. Without active credit accounts, you can be sure your credit score will drop. Make sure you have at least one credit card that you use regularly and pay off in full every month.
• Be careful about co-signing. If a child or a grandchild has asked you to co-sign for a loan or credit product, think twice. Co-signers are responsible for the debt if the primary borrower defaults. The borrower's payment history and the account will also show up on your credit report. If they miss a payment, your credit score will suffer.
• Keep old accounts open. The average age of your accounts influences your credit score. Don't close old accounts that you don't use unless you want to avoid annual fees because it lowers the age of your credit history and it can affect your credit utilization ratio.
• Check your reports often. Every year, you can request free copies of your credit report from Experian, TransUnion, and Equifax. This is recommended so you can watch for signs of identity theft and make sure there are no mistakes like incorrect negative information or payments incorrectly reported as late.

Compare Rates

It always pays to shop around. When it comes to auto insurance, it's a good idea to shop around and get several quotes about once a year to make sure you are getting the best possible rate. You may even qualify for coverage you couldn't before as a senior such as coverage through the Hartford which is offered through an AARP partnership and designed for drivers 50 and older.

This article has not been paid for by any advertiser. This content is intended for informational and entertainment purposes only and is not a substitute for professional advice or analysis.