01/27/2016 02:28 pm ET Updated Jan 26, 2017

3 Steps to Saving on Your 2016 Car Insurance Costs

Car insurance is an inevitable - and often costly - part of almost all American motorists' budgets. However, it exists to protect motorists from unexpected financial crisis, if they should ever be involved in an accident. There are three simple tips that can help you get your car insurance costs under control (it gets crazy, we know.)

  1. Compare three quotes online. Car insurance costs can easily cost two to three times more for no other reason than choosing the wrong insurance company. In Michigan, as an example, annual premiums from the most expensive company were quadruple the cost of the most affordable out of the 17 companies we analyzed. By getting at least three quotes, you present yourself with a range of options. It can also be more convenient to get quotes online, so you don't feel pressured into a hasty decision in an agency or over a call. Insurers nowadays do a great job simplifying the quoting process with their online tools. More importantly, these tools are often equipped with interactive widgets that explain the meaning of your every coverage decision as you go. So go online, check out three companies and learn about the best deal you can get.
  2. Revisit discount options. If this is not your first time shopping for car insurance, your policy probably has benefitted from several discounts here and there. However, some discounts expire, and others become available as your life evolves. The worst part is your insurer usually won't actively inform you about these changes. To give a few examples of discounts: the new car discount expires 3 - 5 years after you first buy your car. The Defensive driving discount needs to be renewed every 3 years. Early signing discount from switching? Give it one policy period. Ideally, try to review your discount options each time you renew. Otherwise, reviewing them once every three years can suffice. The biggest discount that takes time to qualify for is the Good driver discount, which awards those who have been ticket/accident-free for 3 - 5 years for 10% or more. Have you recently celebrated retirement? Check in for low mileage and/or mature driver discounts. If you qualify for both, that can add up to 30% off on parts or all of your coverage premiums.
  3. Understand the difference between agent and direct insurers. Before you commit to an insurance company this is an important decision to make. Knowing what you value more when it comes to ongoing services will make sure you get the experience you pay for. Most companies that allow you to close the deal online or over the phone are direct insurers. These companies are usually cheaper (less labor costs), and possibly have more operating hours or online capabilities to make sure they stay competitive. Examples of direct insurers include GEICO and Progressive. However, it is less likely that you can find the same agent who helped you with the last claim and understood your personal situation. A company that mostly sells through exclusive or independent agents gives you the chance to build a longer-term relationship. Many consumers enjoy having one point person to contact for all their troubles, and receive holiday greeting cards from. Examples of agent insurers include Allstate and State Farm.

The bottom line is, it pays to be an informed and proactive consumer. An insurance policy is essentially a complex product that is supposed to protect you. Compare across insurance providers for the right company for you, get several quotes and look out for discounts so you do not pay more than you need to.