Auto insurance is a necessity for any driver who wants to legally operate a vehicle on public roadways. Auto insurance costs can vary, but nearly every driver would like to reduce the amount of money he or she pays in policy premiums each year.

If you are receiving a tax refund this year, it's the perfect opportunity to lower the cost of your auto insurance policy.

1. Take Advantage of Premium Discounts

Instead of opting for a policy with less coverage to keep your monthly premiums low, talk to your auto insurance agent about switching to a single premium payment. Most insurance companies offer their policyholders a discount for paying their policy premiums upfront instead of monthly.

By using your tax refund check to make this larger payment, you can upgrade to an auto insurance policy that offers more coverage for roughly the same price as your existing policy.

2. Take a Defensive Driving Course

Insurance companies recognize that safe drivers are more affordable to insure. As a result, many insurance companies will offer policy discounts to drivers who take action to improve their driving skills.

Talk to your insurance agent about the money you could save by enrolling in a defensive driving course. These courses are designed to teach you to be more alert and aware of potential road hazards, which will reduce the likelihood of your being involved in an accident.

You can use your tax refund check to pay the course registration fee if you choose to use a defensive driving course to lower your auto insurance premiums.

3. Install an Anti-Theft Device

Vehicles without an anti-theft system can be an easy target for anyone looking to steal a car. Your insurance company knows this, and your policy premium may be higher if you don't have an anti-theft system in your vehicle.

You can use your tax refund check to pay for the installation of an anti-theft device like an electronic immobilizer, kill switch, or vehicle tracking system. The installation of these devices has the potential to reduce your auto insurance costs by up to 30%, making them a worthwhile investment.

There is no way to avoid paying for auto insurance if you own and drive a personal vehicle, but there are some simple things that you can do to help minimize insurance costs. Use your tax refund check to fund your efforts to reduce your auto insurance premiums this year.

To learn more, contact an auto insurance company.