Car insurance exists because of the need to financially cover your obligations in the event of an accident, or of a loss. The insurer rates each customer for potential losses and then charges accordingly. You, of course, want to keep your perceived risk as low as possible so that you can save money and get great rates.

If you have a small loss, it may be better if you do not make a claim to your insurance company. Instead, pay for it out of your own pocket. Otherwise, you run the possibility of having your rates raised over a small loss that you could cover yourself. This will let you save money in the long run.

You can also save money on car insurance by raising your deductible just for this purpose. By having a higher deductible, say $500 or $1,000, your insurance company will not pay anything below the deductible level anyway. You must pay first and your insurer will not raise your rates if the loss is below the deductible amount.