In today's tight economic times, most people are looking for ways to rein in their spending and cut down on their bills. One monthly cost--in particular--that many individuals and families are trying to reduce is car insurance. From downsizing liability to property damage coverage, many drivers are turning to bare bones auto insurance coverage.

However, not having adequate coverage could lead to serious financial problems if you end up in an accident.

Five Ways to Save Money on Your Auto Insurance

Instead of relying on a skeleton policy, consider some of these practical steps you can take to save money on your insurance premiums.

1. Increase your deductible. If you have a good driving record, trust your ability to remain claim-free, and can afford the higher out-of-pocket costs when you file a claim, then a higher deductible can be a great way to save on your monthly premium. Stay out of harm's way on the road and you should save money in the long-run.
2. Consider driver's school. Defensive driving courses are not just for the 15- and 16-year old crowd. Today, many states require insurance agencies to reduce premiums for drivers who complete an approved driver improvement program. Strap on your driving helmet and hit the books--it could help you score a discount on your premiums.
3. Shop, shop, and shop. Take advantage of the competition between insurance providers by going online and conducting a shopping comparison. Get multiple quotes before settling on your new policy to ensure an exceptional deal. The first quote may have a great-looking price, but you may be able to find an even lower one.
4. Get discounts for multiple policies. Most insurance companies offer discounts for clients who have more than one policy with their company. If you have a homeowner's, life insurance, or business policy with a given company, ask your rep for a discount if you give the company your auto insurance business.
5. Improve your credit rating. Here's a little secret about how your car insurance company sets your rates--it takes your credit scores into consideration. You may find yourself paying higher premiums if your payment history is spotty or you have a bad credit rating. Look to improve your credit score by paying your bills on time and by checking your credit report for inaccuracies.

It's understandable to put paying the mortgage or rent ahead of your car insurance premium--but a no-frills, bare-bones policy could set you up for a financial catastrophe in the long run. Instead, look for creative ways to save on your car insurance--you may be able to save more money than you think.

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