By Jon Cook
MoneyMix Contributor

Everyone knows gas is expensive, but that's just one expense associated with owning a vehicle. Another major cost: insurance. Knowing how to shop for a policy can save you a bundle.

shop around

"Shopping is how you save money," says Bob Hunter, director of insurance at the Consumer Federation of America, Washington, D.C. "I shop for a new policy every two to three years or whenever my premiums go up."

You want to shop and compare rates when you buy an initial policy, but it's also a good idea to compare price every few years after that. Often when you've been a customer for a year or two, the company will begin to raise your rates, expecting you not to make the effort to find a new company.

Keep an eye out for companies that will bundle your insurance policies.

Hunter has a very specific method for shopping for a new policy, while keeping both cost and service in mind.

"I recommend using the National Association of Insurance Commissioners' (NAIC) website to help do the shopping," he says.

The NAIC website offers resources to help you get the best insurance no matter what part of the country you live in. First, pick your state or jurisdiction on the interactive map. Each state has its own insurance department pricing and specific restrictions to keep in mind, so look at your state's page. Some states have auto insurance-rate calculators to help you determine the ballpark figure for what your rate should be.

Each state also publishes a report outlining the number of complaints each insurer has received over the past year. Looking at these reports can give you a better idea of the service you'll receive once you buy a policy.

Hunter says he gets seven quotes and drops the three highest right away. Of the four remaining, he looks at the number of complaints filed with the state. He's then able to decide which company will give him the best price and the best service.

drop what's unnecessary

The average car insurance rate is $789 a year in the U.S., according to the Insurance Information Institute (III), New York. This overall rate is made up of six types of coverage that are added up to get your final bill. The III gives a full breakdown of the coverage types.

You can opt out of types of coverage that you may not need. For example, if your car isn't worth much money, you might want to consider dropping collision and comprehensive coverage and stick with the low level of liability insurance that all states require.

discount city

Insurance tends to be most costly for new drivers, but rates can be inflated until you're at least 25. Right off the bat, there are factors that can help or hurt the rate you pay, including your driving record, the type and value of your car, your credit rating, your marital status, how much you drive, and even your career or degree.

Insurance companies often offer discounts based on these criteria. Safe drivers, college students, and low-mileage drivers often can benefit.

Some companies even will put GPS tracking devices in your car, at your option, to determine your driving habits and base your rates on how you drive.

Carriers also offer defensive driver and general driver training courses you can take to lower your rate right away.

"These classes can be a great way to save money," says Lazetta Braxton, founder and CEO of Financial Foundations, LLC, in Chicago. "The courses are a lot like those for people who get in trouble, so sometimes there's a stigma around them, but they're a great way to save."

bundle to save a bundle

Keep an eye out for companies that will bundle your insurance policies. That means taking out renters or homeowners insurance from the same company where you buy your auto insurance. You can save up to 15% on your premiums by doing this alone.

 Learn about auto and other types of insurance.

 See average auto insurance premiums by state.

 Find insurance incentives and deductions.

If you're worried you won't have enough coverage, you can get inexpensive umbrella coverage on top of your insurance "bundle."

"You can get $2 million in umbrella coverage for $200 to $300 per month, because your chances of filing a claim that is big enough to tap into that coverage is low," says Hunter.

premium vs. deductible

When you buy a policy, understand the relationship between premium and deductible. The premium is the amount you pay each month to maintain the policy. The deductible is the amount you must pay before the insurance policy kicks in and covers damages. The two typically work hand-in-hand: The higher the deductible you're willing and able to pay, the lower premium you pay each month.

You'll likely decrease your premium by 15% or more by increasing your deductible from $250 to $1,000. Realize that you'll need to have savings set aside that is more than this amount in case you get in an accident.

"You can think of paying a higher premium as a penalty for not having an emergency savings plan," says Braxton.

bank your savings

One way to ensure you have enough money in your account to pay the deductible if you need to make a claim is to pay the amount you save each month to a separate account that you can grow and use if you have to. Think about putting money in this account for insurance premiums as well.

"Over the last 30 years, I have saved over $10,000 in a casualty account by taking a high deductible," says Hunter. "You may have to pay extra for a few fender-benders, but you save in the long run."