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Whether buying coverage for the first time or renewing an existing auto insurance policy, consumers should take advantage of a highly competitive insurance marketplace, according to the Insurance Information Institute (I.I.I.).

Consumers can contact their insurance agent or company representative to make sure they are getting the right type of auto insurance at the best possible rate. As a consumer, it is important to educate yourself about all of your coverage options by asking questions and making sure you are getting any available discounts.

Your insurance premium rate is based on a variety of factors including your driving record; how much you use your car; where it is parked and where you live; the type of car you drive; your age and gender; your credit score; and the type and amount of coverage.

To help consumers get the best auto insurance policy at the best price, the I.I.I. offers the following suggestions:

1. Comparison Shop

Prices and coverage levels vary from company to company, so it pays to shop around. Get at least three quotes. You can call insurance agents or companies directly, as well as get information on the Internet. But, do not shop by price alone--look for an insurance company that has a reputation for good customer service. Ask friends and relatives for recommendations and check consumer guides as well as your state insurance department's website. And, lastly remember to review the insurance company's financial strength rating.

2. Check Insurance Costs Before Buying a Car

Auto insurance premiums are based in part on the price of the car, the cost to repair it, its overall safety record and the likelihood of theft, so it is worth taking these factors into consideration before making a decision about which car to buy.

3. Increase Your Deductible

A deductible is the amount you pay before your insurance policy kicks in. By requesting a higher deductible on comprehensive or collision coverage, you can lower your premium costs substantially. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.

4. Reduce Coverage on Older Cars

Consider dropping the optional comprehensive or collision on older cars. If the market value of your car is less than 10 times the auto insurance premium you are paying, purchasing comprehensive and/or collision coverage may not be cost-effective.

5. Ask About All Available Insurance Discounts

Insurance companies offer a wide variety of discounts--here are some you can ask about:

Antitheft devices

Multiple policies with the same company

College students living away from home

Defensive driving courses

Drivers ed courses

Good credit record

Higher deductibles

Low annual mileage

Long-time customer

More than one car

No accidents in three years

No moving violations in three years

Student drivers with good grades

Courtesy:  Marketwatch.com

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