Safe Ways to Spend Less on Car Insurance
So, to maximize your coverage while minimizing your premiums, consider:
- Higher deductibles
The deductible is the amount that you must pay in the event of an accident before your insurer starts to pay. So, if you raise your deductibles, that will mean you pay more in the event of an accident that's your fault. You can go years and years without an accident. In the mean time you are likely paying a premium for a deductible of, say, $250. The point here is that the majority of providers significantly reduce premiums with every incremental increase in deductibles. If you are a saver and a good driver, you can cut hundreds off of your premiums if you set your deductibles at $1000 per accident. And over time, you can save that amount many times over.
- Lower your limits
When you buy a new car or if you lease, you are required to carry fairly high coverages. Some leases require upwards of $300,000 or more for liability and medical. But many drivers assume that these levels which are intended to protect the auto manufacturer more than you, go by these levels even for cars that are bought with cash or are now paid off. Reducing coverage limits should not be done just to cut costs. But there are often other things that you already pay for that would cover you. For example, why pay for $300,000 in medical protection in your car insurance if you already have health insurance that will cover you up to $1 million? But if you can safely reduce your limits, this can offer a good amount of savings. Just don't put yourself at risk when you exercise this option.
- Check into discounts
Many times people have had a policy with the same company for many years. During that time, many providers will have introduced discounts that existing clients qualify for. In other instances, over time their customers will mature and enter into a discount category, becoming a homeowner, for example. But do you think that these insurers will go on a quest to find out if you qualify to pay less in car insurance? Uh, not likely. No, you will have to be your own advocate in this case. So, contact your provider or agent and ask for a list of discounts. You'd be surprised how much can be saved for things that you already qualify for. Anti-lock breaks on your car? Teenagers have gone off to college? You stopped smoking? You bought a home? Children who get great marks at school? You installed an anti-theft ignition lock? You now have a much shorter commute to your new job? All of these may mean savings.
- Reduce protection on used vehicles
With the exception of liability, used cars often need very little coverage to keep you protected. Why carry replacement coverage on a vehicle that's worth $800? There are a few rules of thumb you can consider for whether you are carrying too much coverage on an older, paid for vehicle. For example, if you are paying more than ten percent of the car's resale value in premiums, then you have too much coverage. Simpler questions to answer are: Is the car over five years old or older? And is it paid for. Then you can likely afford to reduce your coverages and come out ahead.
- Compare car insurance companies
Here's a piece of advice that is close to our hearts: look for better rates without adjusting a single thing. And, then consider all the above for a little gravy on top! But don't just go for price. You don't have to. Insurers are becoming more and more competitive. Each is vying for your business, and are being pinched to offer good service and good rates. But be very wary of discount and budget providers that sell themselves on price alone.