- [Host] Auto insurance companies use a lot of info about you to determine your premiums: your age, gender, marital status, education level, financial history, even your living situation.

They're in the business of trying to predict the future, and they think a young, unmarried guy with a bad credit score who shares an apartment with his bros is more likely to be a reckless driver than a middle aged mom in the suburbs because, well, most of the time it's true.

- This may make it feel like auto insurance rates are out of your control.

People who depend on their cars may think of it as an expense that's written in stone, and may overlook it as a source of potential savings.

- There are, in fact many ways to lower your car insurance premiums, but not all of them are right for everyone.

It depends on your situation, your personality, and your comfort level.

Some may involve changes in your behavior or routine.

- And some just require a phone call.

(lighthearted music) - The first step is to make sure you're getting the best rate that your current insurer can offer you.

Most insurance companies have a long list of possible discounts listed on their websites, things like driving less than 10,000 miles a year, owning your own house, or even having a kid with good grades.

Some of these discounts may be automatically applied to your policy, like driving a car with a higher safety rating, but others you may need to opt into.

- There are changes you can make to your policy that will bring down your premiums, and the most obvious is raising your deductible.

A deductible is the amount you are personally responsible for paying when filing a claim.

The higher the deductible, the lower your premium.

How much you're comfortable shelling out in case of an accident may depend on your financial situation.

But consumer reports estimates that going from a $500 deductible to a thousand can lower your premium by an average of 20 to 25%.

That means if you're paying a thousand a year on premiums, the savings would equal the difference in deductible in just two years.

- You can also downgrade your coverage to liability only, meaning if you're at fault in an accident, your policy would only cover damage to other people and property.

This especially makes sense if your car is older or inexpensive and wouldn't be a huge loss if it's damaged or totaled.

The average liability-only policy costs less than half a full coverage policy.

- One caveat to that: a liability policy will only pay damages up to a limit per incident.

Anything over that limit you'll be personally responsible for.

Most states require a liability coverage minimum that's far below what you could actually be sued for if you cause an accident.

In these cases, courts can take your home, your investments and even garnish your wages to make up the difference.

So it's not usually advisable to go with the minimum just to save a few bucks a year.

After all, the whole purpose of insurance is to protect you from financial catastrophe.

- Most insurers will offer discounts to customers who have more than one policy with them.

If you have multiple cars, using one company for all of them is usually the best way to go.

If you own a home and your auto insurer also offers homeowners insurance, they may give you a discount for bundling them together.

- If you happen to be within a demographic that is considered risky or if you have some infractions on your driving record, there are some things you can do to improve your rep. One is taking a defensive driving class.

For only around 25 bucks and five hours of your time, you can get a 10% discount on your premiums depending on your state and insurer.

You can also agree to have your driving habits monitored digitally by your car or a proprietary phone app.

They use GPSs and accelerometers to track things like how fast you go, what routes you take, and what times of day you tend to drive.

Weekend night drivers are considered risky.

Some can even tell whether you have a habit of peeling out or slamming on your brakes.

(tires screeching) - If you are a generally safe driver, opting into one of these usage-based insurance programs can lower your premiums.

But if that feels like too much of an invasion of privacy, be aware you may still be monitored without your knowledge.

In 2024, "The New York Times" found that some cars were automatically collecting driving behavior data, known as telematics, and sharing them with aggregators who then sold them to insurance companies.

The same can go for certain phone apps that have access to your GPS like map and weather apps.

Very deep in their terms and conditions may be a clause that permits them to share your driving habits with your insurance company.

- Some say this could make premiums more fair.

Isn't it better to be judged on your actual behavior than stereotyped by your age, gender, or education?

- And if reckless driving could actually cost you money, maybe it would decrease the number of accidents.

Of course, that requires the driver to actually know they're being watched.

- Once you've got all the discounts you can squeeze out of your insurer, it's time to shop around.

You can contact other auto insurance companies directly or use one of those comparison sites that collects all your info and supposedly finds you the best rate.

But, be warned, like most middlemen websites, many of them will sell your data and harass you with spam calls and emails long after your search is over.

- I prefer to talk to an insurance company rep over the phone who can answer questions about which discounts I qualify for or which factors are stopping me from getting a better rate.

You can also get the help of an insurance agent.

I know, another middleman, but they can sometimes hook you up with smaller local insurance companies whose policies may be a better fit than the national behemoths.

- One more piece of advice.

If you're looking to buy a car and haven't picked one out yet, have your insurer run the different models through their algorithms.

Depending on the price, reliability, and safety features, it could impact your premiums and, thereby, your choice of car.

- Even if you're happy with your car insurance, uncommon but possible, it's important to remember that it is an expense you have control over.

- Because, as your life situation changes, so will your premiums.

Maybe you'll get a speeding ticket, maybe you'll move to a new state, buy a home, get married, or have to add a teenager to your policy.

Oh dear.

- Breathe.

Life changes, big and small, can change the calculus on your auto insurance, so don't just let the algorithms walk all over you.

Check in at least every year to make sure you have some say in the equation.

- [Both] And that's our two cents.