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Saving money on car insurance
By Daniel | April 13, 2008
It can be hard to find areas to save substantial amounts of money. By spending a little time checking your current auto insurance policy or shopping for a new quote you can sometimes save as much as a few hundred dollars. Most websites for insurance agencies will give you an online quote instantly or show you the change in your premium if you were to adjust your current policy. With access to online quotes becoming so easy to obtain, this has caused insurance companies to be even more competitive among one another.
When searching for a new company, the cheapest premium is not always the cheapest in the long run. A good place to begin is by asking your friends, family, or co-workers which insurance company they use. Find out if they are happy with the service or if they are thinking about switching. Then ask if they have ever filed a claim and how it was handled. Many times waiting to get your money or your car fixed can be a long and drawn out process. The next step is to check independent ratings of insurance companies. Two sites that are a good reference and well known are J.D. Power and Consumer Reports. Consumer Reports can also be found at bookstores or the library. After compiling a list of recommendations you can then proceed to get a quote from each company. It is usually recommended to check rates every 1 to 2 years.
When reviewing your current policy always remember to have at least your state minimum requirement. While the state minimum is usually pretty low you will want to have coverage that is appropriate to your net worth. The required coverage you will need is:
- Bodily Injury Liability
- Covers medical, rehabilitation, and funeral bills of the people involved. It also covers pain and suffering awards and legal costs.
- Recommended $100,000 per person and $300,000 per accident
- Property Damage
- Covers the repair or cost to replace another person’s vehicle and property damaged by your car.
- Recommended $100,000
- Uninsured and Under-insured Motorist Coverage
- Covers bodily injury if you are in an accident with someone who has little or no coverage as well as a hit and run.
Changing the deductible on your liability from $250 to $500 or even $1000 will definitely lower your premium but always remember that if you need to use the coverage you will be paying the deductible out of your own pocket.
There are a few ways of saving money by determining which optional insurance coverage you need. The first is comprehensive and collision coverage. If you have a new car loan or a lease you will most likely be required by the lending company to have this coverage. They will also specify the highest allowable deductible for this coverage and by choosing the highest deductible, usually $1000, you can again save. If you own an older vehicle and your coverage is 10% of the blue book value of your car this coverage is then no longer cost-effective. Dropping comprehensive and collision is a sure way to reduce your premium. Find out how much your car is worth at Kelly Blue Book.
Additional coverage you can drop to save some money is roadside assistance and rental reimbursement. Most people can do without these extras and if you already have roadside assistance through AAA or On-Star, there is no need to double up.
Discounts, Discounts, Discounts. There is a list of discounts and the more you can qualify for the more you can save. Some typical discounts include:
- Multiple Policies with the same company
- Low annual mileage
- Group and auto club
- Good credit rating
- Safe driver
- Multiple cars
- Driving safety education
- Equipment (airbags, alarms, safety belts, ABS)
- Good student
- Long time customer
The last two suggestions are not immediate but can also save on insurance. Number one is check rates on a car before you buy it and choose a car with a good overall safety record and low risk of theft. The final money saving strategy is to keep your driving record clean and drive safe. The last recommendation should be the easiest.
Topics: Auto, Consumer-Shopping, Insurance |