Today's tip is part of our Fiscal Fitness '09 series. Every weekday this month, you'll get help getting fiscally fit as we work toward our goal of saving $2,000 to invest in three stocks!

Last week, we honed our negotiation chops by talking our way into better deals on cable TV and credit card interest rates. Today's Fiscal Fitness '09 task will be a breeze in comparison: Get ready to make a phone call that could shave as much as $500 on your car insurance premiums.

Scoring better rates on car insurance is simply a matter of asking the right questions and being willing to take on a bit of the insurer's risk.

Up your deductible and pocket $328
According to the Insurance Information Institute, if your current deductible is anywhere south of $500, you're probably paying a premium for your coverage.

Increasing your deductible from $200 to $500 could reduce the cost of collision and comprehensive coverage by 15% to 30%. With the average annual premium around $820, that one move could put $123 to $246 back in your pocket. Increase it to $1,000, and we're talking 40% or more in savings on your premium, or $328-plus.

Remember, the higher your deductible, the more money you will pay out-of-pocket before your coverage will kick in. Still, given the hair-trigger temper of insurers these days -- dropping customers like last-minute prom dates at the first sign of trouble -- paying for small claims regardless is a prudent move.

If you already have a high deductible, don't click away just yet. There are plenty of other ways to slash the costs of covering your automobiles.

Drive less and save 10% to 34%
High gas prices got a lot of people in the public-transportation habit. If you've stuck with it -- or for some other reason are driving less -- Mother Earth isn't the only one showing her appreciation.

According to a SmartMoney survey of major auto insurers, driving fewer than 7,500 miles annually can earn you discounts on your premium from everyone from State Farm to Progressive (NYSE:PGR). You can slash your coverage costs anywhere from 10% to 34%. Customers whose one-way commute clocks in at less than 10 miles may be eligible for an additional 5% discount at some insurers. Every little bit helps. A 10% discount means $82 off the average annual cost of coverage.

Insurers require different levels of proof, ranging from a simple phone call letting them know you're spending less time behind the wheel to using an electronic mileage/speed diagnostic device.

Brag to the sales rep for even more savings
As long as you're on the horn chatting up the insurance company rep, inquire about other potential discounts. The Insurance Information Institute has a checklist of discounts to inquire about in addition to the low-mileage and higher-deductible tips already covered. Ask about discounts for:

  • Insuring more than one car
  • No accidents in three years
  • No moving violations in three years
  • Drivers over 50-55 years of age
  • Taking a driver training course
  • Taking a defensive driving course (see "More ways to save" below for details)
  • Having a car with an anti-theft device
  • Having a car with safety features such as air bags, anti-lock brakes or daytime running lights
  • Being a student with good grades
  • Combining your auto and homeowners coverage with the same company
  • Having college students away from home
  • Being a longtime customer

The list may seem long, but the savings can stack up significantly. For example, combining your homeowners and auto coverage is worth a 10% to 20% discount. Young drivers who are students acing their classes could get a 25% break. Parents who shipped Junior to college at least 100 miles away could cut their costs by as much as 40%. Given how much insurers like Allstate (NYSE:ALL) advertise these discounts, it's criminal not to take advantage.

More ways to save ...

  • Look for more discounts: Look closely and you may find extra discounts in places you wouldn't expect. Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) GEICO unit gives discounts to members of a number of organizations and associations -- including Berkshire shareholders.
  • Go to driving school and save: Taking a defensive driving course can nab you a break on your car insurance premiums. For those 50 or older, the AARP's Driver Safety Online Course makes it easy to earn class credit. But be sure to first check with your insurance agent or customer service rep to find out if your insurer offers deals for schooled drivers (and if an online course is kosher with your state laws). A defensive driving course can result in an additional 10% discount.
  • Stop paying for out-of-date coverage: If it's been a while since you reviewed your policy, do that now. Make sure you're not paying to insure a child who is no longer on your policy, or that you're not still paying for the value of your car when it was new. According to, dropping collision and comprehensive coverage accounts for 40% or more of the cost of your premium. Since it covers only replacement value, consider dropping it if any claim payment would not amount to much more than your premiums minus your deductible.
  • Consider the car you drive. What car you own can have a big impact on insurance costs. On Bankrate's list of 10 least expensive cars to insure, Ford (NYSE:F) and General Motors (NYSE:GM) cars dominate the list, while imports like Toyota's (NYSE:TM) Scion joined the Cadillac Escalade at the top.
  • Comparison shop -- but carefully: Before you switch, consider the cost of losing any loyalty or good-driver discounts you've earned. Also be aware that getting a full-fledged quote for coverage may appear on your credit record and your insurance record. If you decide to shop around and want to compare the majors with some locals, go to the Independent Insurance Agents & Brokers of America website or to find someone local to give you a quote. If you're serious about switching, first look into the insurer's consumer complaint record, which you can do at your state's department of insurance via the National Associate of Insurance Commissioners website.

Read the latest from Fiscal Fitness '09: 1 Month, 2 Grand, 3 Stocks to get our other money-saving tips. We're warming up your budget by cutting back on everyday expenses. You can also keep up with our daily tips through our daily Foolwatch email. Share your frugal insights and experiences through our Fiscal Fitness '09 discussion board, or leave a comment below.

Fiscal Fitness boot camp instructor Dayana Yochim owns none of the companies mentioned in this article. The Fool owns shares of Berkshire Hathaway, which is a Motley Fool Inside Value selection and a Motley Fool Stock Advisor pick. Bankrate is a Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy that works hard for the money.