Ah here we are, in the midst of New Years Resolutions season! Of course, if you're reading this cool, propitious, and engaging blog (I like to give my readers a vocabulary lesson every now and then), then financial resolutions are surely on your radar. It's no surprise that if you own a car, you must pay for auto insurance. And rather then skimping on everything besides liability coverage, you can reduce your premiums in a few ways rather than just asking for discounts or shopping around.

1) Pay Annually - This one should be pretty easy to remember. When you sign up for internet, a subscription pet food service, or web hosting platform, ever notice the big red strike of price, followed by a lower price if you pay for the year upfront? Most businesses want the security of recurring revenue, and will usually provide an incentive to hold onto you as a customer rather then risk losing you to a competitor each month. In addition, many large corporations have additional administrative expenses related to sending out an invoice each month and making sure it's collected. The solution? Well, just pay once a year! This will become easier once you follow the advice in Financial Fives and build a cash reserve, thus saving you more money over time, that will allow you to replenish your cash reserve. Talk about a positive feedback loop! My car insurance company charges a $7 admin fee per month if you pay monthly. That adds up!

2) Make Sure Your Policy reflects the Actual Mileage - With the pandemic and many people working from home, there were news articles of auto insurers actually voluntarily refunding their customers, because people driving less means, well, less accidents. Thus, they have to pay less claims, and can refund the excess premiums collected to their customers. Even without a pandemic, you always want to make sure the "estimated miles traveled" per year is accurate based on how much you really drive. Your insurance carrier might ask for odometer verification, which is easy, or you just contact them to let them know you drive this vehicle less, or now work from home. The same sentiment applies here. If you only drive 5,000 miles a year versus someone who drives 15,000 miles per year, you have a less likelihood of having an accident or claim, and thus you are less of a risk (holding other variables constant). So, easy way to save some money!

3) Increase Your Deductible - Have you ever noticed during your open enrollment, that the higher deductible health insurance policies typically cost significantly less? Same logic applies to car insurance. If you have more skin in the game, the insurance company is going to think you will be less reckless. Plus, if you do screw up, there is more of a burden on you the higher your deductible is. So, here is another example that if you have a plush cash reserve (at least more plush than at the end of the holiday season), then you can afford to change your deductible from $500 to $1,500 or higher. The money you save on your auto policy by doing this can also be redirected to replenishing your cash reserve if, in the odd chance, you actually need to make a claim and cough up the higher deductible. Now, go and make these changes and start saving $$$!