Next year could be a good time for car insurance customers who want policy discounts and are willing to ask for them.

At the same time, more drivers may scale back their coverage in 2011 by pinching pennies, a decision that could have major consequences.

Insurance experts say those developments are likely to be part of the five biggest car insurance trends for the coming year.

Auto insurance markets in many areas of the country are soft because of the economy, says Ryan Hanley, an insurance broker with the Guilderland Agency in Albany, N.Y.

As a result, companies are competing for fewer customers, which has kept premiums low or stable, he says.

"Insurance companies will be spending more money next year to reach their desired customers," Hanley says.

The trend for 2011 is for premiums to continue to remain competitive, Hanley says. You can take advantage of insurers' moderate rates this year by shopping around for the best car insurance deal.

In general, get at least three different auto insurance quotes before making a decision on a company, says Alex Hageli, director of personal lines policy for the Property Casualty Insurers Association of America (PCI), a Des Plaines, Ill., trade group.

Companies will continue to offer discounts and incentives in 2011 – such as a premium refunds or diminishing deductibles to existing consumers who remain claim-free, Hanley says.

"Pay as you drive" insurance policies are among the discount plans most likely to grow in popularity next year. These policies offer drivers a premium based primarily on the number of miles they drive each year. This can lead to big savings for people who drive relatively few miles.

"Pay as you drive" is a fairly new industry product, but mileage-based insurance is growing in states such as California and Texas.

"I see more companies starting to collect mileage information and incorporating it into their insurance products," Hageli says. "It's the next big thing."

Insurers offering these policies have different ways to determine how many miles consumers are driving. Some companies place a device in the policyholder's car. It collects driving information, and is then uploaded to the insurer, Hageli says.

Other providers review mileage readings from annual inspections to determine how many miles a policyholder has driven in a year.

Although mileage-based insurance is increasing, it won't replace traditional insurance anytime soon, Hageli says. Other factors that go into figuring a policyholder's premium – such as age, gender and marital status – remain important, he says.

If you plan to drive fewer miles in 2011 than you had in previous years, contact your insurance company and see if it offers a mileage-based policy. It could result in hundreds of dollars in premium savings, Hageli says.

Another trend in car insurance is that companies are offering more benefits, such as a premium refunds or diminishing deductibles, to existing consumers who remain claim-free, says Hanley.

Because of the sluggish economy, insurance companies will try to take more market share at the expense of weaker, smaller insurers, Hanley says. They will do this by offering more incentives, such as accident forgiveness, he says. 

The best way to benefit from this trend is to not get in an accident, says Hanley. This year, if don't have to file a claim, ask your insurance company if they offer "accident-free" incentives.

Some insurance companies are making it easier to use your smart phone to do everything from buying insurance to filing an accident claim. Exactly what you can do varies based on the type of phone you have and your auto insurance provider.

A survey by USAA found that many consumers don't check insurance costs before buying a vehicle, says Bob Otis, USAA's assistant vice president for integrated solutions. Now, members with an existing USAA auto insurance policy "can compare insurance costs for different makes and models while at the dealership using Auto Circle through the USAA Mobile app on their iPhone or Android phones."

They can also use the application to add the new vehicle to their insurance policy.

With the Progressive iPhone app, customers can do everything from pay their bill to file an accident claim to get an insurance quote for cars, motorcycles or recreation vehicles. GEICO's GloveBox app operates on BlackBerry, Windows Phone 7, iPhone and iPad, and allows customers to do things like pay bills, access insurance identification cards, and get assistance in case of an accident.

Until the economy improves, one disturbing industry trend is likely to continue – more consumers cutting back on insurance because they don't think they can afford an adequate policy.

"I have seen people getting less coverage in order to have more money to pay their other bills," Hanley says.

Consumers must set their own spending priorities, but being underinsured can come back to haunt you if you are in a car accident.  

Drivers who scale back coverage may not have enough insurance to cover damages and injuries after an accident, Hanley says. Underinsured drivers who are at fault could put their assets at risk if they are sued.

Consumers who do their research and compare auto insurance quotes can find a provider offering adequate coverage that doesn't bust the budget, he says.

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