Auto insurance deductibles and consumer confusion tend to go hand-in-hand. What are car insurance deductibles, and what size deductibles are right for you?

A deductible is the amount of money that you, the policy owner, must pay for vehicle repairs before your insurance company’s coverage will be applied. Customers choose deductibles for two sections of their auto policies: collision coverage and comprehensive coverage.

Of all the sections on a car insurance policy, the deductibles are the safest to skimp on if you’re looking for low cost car insurance. These do not affect your medical benefits, and state insurance laws impose no minimums.

How much of a deductible should you pay? A typical deductible is about $500, and most range from $100 to $1000. To arrive at the right number for you, compute how much you could afford to pay after an accident without the help of an insurance agency.

•    If you choose a lower deductible, such as $200, then you’ll get more assistance after a crash — but your monthly insurance expenses will be a bit higher.

•    If you can afford to pay a higher deductible in the event of a crash, then you can spend less on monthly premiums for your low cost car insurance.

By adjusting your deductibles, you could net a 10% or 20% savings on car insurance.

Winter driving is hazardous to people and their pocketbooks. Auto accidents are a leading cause of fatalities and injuries on icy and snowy days – and making matters worse, car insurance companies typically raise their rates after crashes.

As temperatures fall, how can you stay safe and keep your car insurance costs low? Follow these tips from experienced winter drivers.

1)    When possible, avoid driving on ice and snow. Most errands can be postponed until streets are salted and plowed.

2)    Use snow tires to better grip the road.

3)    Clear your windows completely. Visibility is extremely important, and especially on days when other drivers’ actions are less predictable.

4)    Clear the roof, hood, and trunk of your car. Snow could move to the windows and block your visibility.

5)    Drive slowly. Winter road surfaces are deceiving. For instance, powdery white snow can mask slippery ice.

6)    Know how to skid safely. Steer into the skid; people spin out of control when they work against it. Read your owner’s manual to learn how to handle your brakes in a skid situation. If other drivers or pedestrians are nearby, honk your horn as an alert.

It’s best to avoid driving during wintry weather, but there are many steps that drivers can take to avoid tragic accidents. For more tips about staying safe in your car this season, see this FEMA website.

More and more Americans are driving toward disaster. As people look for additional ways to cut costs, many are skimping on car insurance or dropping it altogether. In fact, a study by the Insurance Research Council estimates that one in six drivers will be uninsured in 2010.
Driving without auto insurance poses a number of serious risks. First, uninsured motorists may face tough state-specific legal consequences. Most U.S. states require drivers to carry liability insurance, and those that don’t have instituted financial responsibility laws. Drivers who do not carry insurance or cannot prove their ability to pay may be fined or imprisoned, have their licenses suspended, and/or have their vehicle registrations revoked.
Second, uninsured and underinsured motorists are putting their own financial well-being at risk. Consumer advocates and insurance companies alike recommend carrying at least $300,000 worth of liability insurance per accident because incurring such costs is possible and would bankrupt most Americans.
Auto insurance can fit your budget. To get low cost car insurance, keep a clean driving record and make sure you’re getting the best discounts possible. You might also try a pay-as-you-go policy if you drive less frequently than the typical driver. A small investment in auto insurance provides priceless peace of mind and could be worth hundreds of thousands of dollars down the road.

Standard car insurance policies include six types of accident coverage. Understanding these components can help you design the best low cost car insurance plan for your needs.
1. Bodily injury liability insurance pays for injuries that the policyholder or another approved driver causes to others. State minimums for this category are as low as $10,000, but insurance companies and consumer advisors advise purchasing more than the minimum coverage; medical bills can easily reach $100,000 per person.
2. Personal injury protection pays for injuries to the driver and passengers in the policyholder’s car.
3. Property damage liability insurance pays for damage that the policyholder or another approved driver causes to others’ vehicles and other property, such as road signs and landscaped gardens.
4. Collision insurance pays for damage to the policyholder’s car when the car flips over, rides over potholes, or collides with another vehicle or object. Collision insurance includes a deductible. It may be safest to reduce spending in this category to get a low cost car insurance plan.
5. Comprehensive coverage pays for damage to the policyholder’s car resulting from something other than a collision, such as a riot, natural disaster, or theft. As with collision insurance, this is a safer area in which to cut expenses.
6. Uninsured/underinsured motorist insurance protects the policyholder against uninsured and underinsured drivers as well as hit-and-run drivers.

This holiday season, unemployment and other financial strains have left many people scrambling for cash – and perhaps vowing to spend even more wisely in 2010. Pay-as-you-go auto insurance is one way to cut costs.

Pay-as-you-go programs are designed in accordance with an individual driver’s daily routine, including when, where, and for long he or she drives. Drivers who drive mainly at off-peak times, for instance, may be offered lower rates than those who typically drive during rush hour. In this way, pay-as-you-go programs help ensure that consumers are not purchasing more insurance than they need.

Unless you drive more than 15,000 miles a year or have a senior discount, it’s probably worth your time to compare pay-as-you-go plans from a few different low cost auto insurance providers. These plans are especially recommended to teenage drivers. Teens fall into a high-risk and thus high-cost category, but they don’t necessarily drive frequently or during peak hours.

Pay-as-you-go programs are a smart way to get low cost auto insurance. They’re a safer alternative than reducing coverage, which could have devastating financial, legal, and medical consequences. Basically, with pay-as-you-go, if you drive less, you save more – sometimes around 50%!

This money-saving option is available in most states.

All sorts of companies offer military discounts, and auto insurers are no exception. In fact, GEICO – the “Government Employees Insurance Company” – first formed to provide insurance to federal employees. Many auto insurance providers reason that government employees as a group are less risky than the general population.

GEICO and USAA (United Services Automobile Association) are among the largest providers of low cost car insurance to military members. Here are some quick overviews of their offerings:

• GEICO gives discounts to active duty and enlisted personnel, veterans, and members of the National Guard and Reserve Forces. The company offers extra discounts to service members with emergency deployments and those who are members of certain military organizations, such as the Marine Corps League or the Air Force Sergeants Association.

• USAA is a member-owned Fortune 500 company. It extends discounts to active duty and enlisted personnel and members of the National Guard and Reserve Forces. It also has specials for officer candidates in ROTC and other government programs. Discounts may also be offered to military members’ spouses and adult children.

Both GEICO and USAA, among others, are known for understanding military members’ unique needs. Whatever company you choose, remember that’s it’s not just about low cost car insurance. You’ll appreciate dealing with a company that’s designed to serve your military lifestyle.

If your family’s auto insurance policy includes a teenage driver, then you’re probably especially eager to save on car insurance. Teens as a group are deemed high-risk, but according to the Federal Citizen Information Center, there are ways you can find low cost car insurance with a teen in tow.

First, encourage your teen driver to reach his or her potential in school. Many auto insurance companies offer discounts to students who earn high grade point averages. As an incentive, you might offer to spend some of the savings on something for your child or the entire family to enjoy.

Second, if your teen moves away to a residential university, consider removing him or her from your policy. Or, if the car will be mostly stored at school, you might change the student’s status to an “occasional” driver until the summer break. Even if the car is stored on a school lot, it will probably be covered by your auto policy. Let your car insurer know that the car will be stored at another location. If thefts and accidents are low on campus, then there could be an additional reduction in your premium.

Finally, take a defensive driving course with your teen. People who voluntarily complete safety courses may be eligible for car insurance discounts.

Flash Demands Cash: Car Models Affect Insurance Premiums

If you care about low cost car insurance, then keep this in mind when shopping for your next automobile; the model of your car affects your insurance premium.

Most auto insurers use a formula devised by the Insurance Services Office, a private risk management organization. The formula accounts for a vehicle’s value as well as its horsepower-to-weight ratio, probabilities of theft, and other factors correlated with a possible loss. The formula yields a rating between 1 and 27, and higher numbers lead to higher premiums.

Which cars are the costliest to insure? Generally speaking, the higher a car’s MSRP (Manufacturer’s Suggested Retail Price), the more expensive it is to insure. Sports cars and luxury cars tend to top the list. Owners of large vehicles that can inflict especially serious damage might also have trouble finding low cost car insurance.

Lists of the top ten costliest and cheapest cars to insure can be found online. However, top ten lists should only be used as a general guideline — your personal information might skew the numbers. When buying your next car, ask several auto insurance companies about their premiums for the cars you’re considering.

How can you get the best auto insurance rate? Check with your state insurance regulator to learn about your minimum insurance requirements. Then, obtain personalized quotes from several low cost car insurance agents – and as they ask questions, be prepared with a few inquiries of your own. Bringing up the following points could help you score unadvertised discounts.
•    Renewal rates – Talk with your current car insurance provider about a renewal discount. If you’ve carried their insurance for several years without costing them a penny, then they should be happy to extend a discount in order to maintain your relationship.
•    Occupation discounts – Insurance rates are based on statistics, and agents know that people in certain professions are less likely to wreak havoc with an automobile. If you’re an engineer, a teacher, a farmer, or another low-risk worker, ask insurance representatives if your job can earn you a discount.
•    Military savings – If you’re an active duty or retired member of the armed forces, you could be eligible for significant discounts on car insurance.

By asking informed questions, you can help design a low cost car insurance plan that meets your needs. This holiday season, give yourself the gift of cheaper car insurance. You’ll thank yourself year-round.

As budgets tighten, smart customers are cutting expenses with low cost car insurance. Here are some clever ways to save.

•    Keep it in the family. – If your family has multiple drivers, ask about family rates. Taking out more than one policy ought to garner you a discount.

•    Stay true to one company. – Many car insurance companies also offer home insurance, boat insurance, and other products. Find out if you can get cheaper car insurance by shopping exclusively with one insurance company.

•    Take a class. Driver’s education classes aren’t just for teens and hazardous drivers. By taking a defensive driving course, you can show auto insurance companies that you’re serious about safety and get rewarded with a safe driver discount.

•    Boost your grades. Students can lower their insurance rates by earning high GPAs. What’s the logic? Insurance companies find that students who pay attention in class also pay attention to the road.

•    Upgrade your vehicle. By adding protective features such as anti-lock brakes, anti-theft devices, and airbags, you could save a significant amount on car insurance.

For more ways to get low cost car insurance, check out the Federal Consumer Information Center’s Consumer Action Handbook.