How Much Should You Really Be Paying For Auto Insurance

It's a fact that most states have different rules regarding car insurance. But most people don't take the time to look at their policy and coverage limits. While we can cover a number of discounts that are available, there are also things that you should review with your policy.

Here are a few ideas to try:

Discounts Based on Your Car and Driving Habits

Many car insurance companies provide discounts for newer cars that have safety features such as side and side curtain airbags, as well as security systems, as Forbes notes. Be sure to have your car's safety and security features available to your prospective insurer for maximum discounts. Color may not be a significant factor, but different vehicle designs make a difference. For example, a Smart car has a worse crash safety rating than an SUV, for example.

One other factor to consider is how you actually drive. If you don't put many miles on your car, thanks to a short commute or it being the second car, you can use that to your advantage. There are special low mileage policies that provide significant cost savings for car insurance. A number of companies also allow you to put tracking devices on your car to monitor whether you drive slowly and reasonably.

The Hidden Discounts: Deductible and Other Limits

Look at your finances for a second, how much you make per month and how much you pay for your car insurance. If you have really low deductibles on your policy, say $200, you may be spending a large amount on coverage that you don't really need. For example, if you can handle $500 for a higher deductible on an accident, you may be able to save hundreds of dollars per year.

You need to weigh whether you can afford these out-of-pocket costs, and just how safe a driver you are. If you rarely get into trouble, a high-deductible policy could work for you, especially if you have some cash reserves.

The other factors that can influence these are protections for personal injury claims, as well as thing s like rental car coverage. If you like the security of knowing you'll have a rental car while yours is in the shop, that may be a good thing. In general, most of these things are rarely needed and could be costing you money, too.