5 Ways to Save Big on Car Insurance

— -- According to Ratewatch Auto Insurance, the average annual auto insurance premium is $1,872. When you consider that most Americans live in two-car families, you’re talking nearly four grand a year for something you hope you never have to use. What a dull thing to spend money on. But here are three ways to spend less:

1. Shop around to see if there are big price differences between companies. Often you can save in the quadruple digits just by switching to another carrier. One caution: switch to a reputable company, not a cheap, cheesy one!

2. Buy your car insurance through a warehouse club like Costco or Sam’s. They partner with some major insurers to offer group discounts to their members. Some warehouse club members have cut their car insurance costs in half by signing up.

3. Raise your deductible as high as you can afford to. The deductible is the amount you must pay yourself before insurance kicks in. When you raise your deductible, the insurance company faces less risk that it will have to pay for petty claims, so it gives you a generous discount.

4. Lower or drop insurance coverage that you don’t need. At some stage your car will depreciate to the point that it is not worth repairing. That’s when it may be worth your while to drop the collision and comprehensive coverage on your old car, which pays for repairs.

5. Get compensated for the diminished value of your vehicle if you’re in an accident. Many people don’t think about the new, lower value of their vehicle in the aftermath of an accident. If the accident wasn’t your fault, you must ask to be compensated for diminished value, especially if you own a valuable car.

Opinions expressed in this column are solely those of the author.

Elisabeth Leamy is a 20-year consumer advocate for programs including "Good Morning America" and "The Dr. Oz Show." She is the author of Save BIG and The Savvy Consumer. Elisabeth is also a professional speaker, delivering talks nationwide on saving money, media relations, and career success. Elisabeth receives her best story tips from readers, so please connect with her via Facebook, Twitter or her website, to share your ideas.