How to save money on a car insurance policy
One simple thing you can do is increase the amount of your deductible.
The lower your deductible, the higher your premiums. Ask yourself
how likely you are to incur expenses, and how often that might occur.
Compare that with the extra amount you’re paying on your policy. For
many people, it makes sense to carry a deductible of about $500 and
pay lower premiums. Hiking a deductible from $200 to $500 can sometimes
save you 15-30%.
Another option is to make sure you’re not over-insuring your car. If
you’re driving an old clunker, you may not want to bother with collision
and comprehensive coverage on it. Cars worth less than $1,000
are often not worth repairing. If you have an accident where the cost
to repair the car exceeds its fair value, the insurance company will usually
opt to "total" the car. That means your car is labeled a "total loss"
and the insurance company is only obligated to pay you the "Blue
Book" value minus your deductible, rather than paying the higher
amount necessary to fix the car. They also will no longer insure the
car, so you’ll be left looking for a new set of wheels.
Many insurers will give you a significant discount (up to 10%) if you
hold more than one policy with them. So, look into buying both auto
and home insurance from the same insurer. Whichever company you
choose, make sure you investigate all possible discounts. Some insurers
will knock off a few dollars for safety devices such as airbags
or anti-theft devices such as passive engine disablers.
Oddly enough, paying a little more for your policy can save you money,
too. Most policies, for a few dollars per month, will pay for a rental
car should your car be damaged and unusable. This can be a big savings,
so it’s something to think about. Something else to include is coverage
that protects you if an uninsured or underinsured motorist hits
you.
Most policies offer a degree of coverage
in this area, but it might not be as much as you need or want.
And finally, do some comparison-shopping! Don’t assume that the price
differences among various insurers are small, because they’re often not.
One simple thing you can do is increase the amount of your deductible.
The lower your deductible, the higher your premiums. Ask yourself
how likely you are to incur expenses, and how often that might occur.
Compare that with the extra amount you’re paying on your policy. For
many people, it makes sense to carry a deductible of about $500 and
pay lower premiums. Hiking a deductible from $200 to $500 can sometimes
save you 15-30%.
Another option is to make sure you’re not over-insuring your car. If
you’re driving an old clunker, you may not want to bother with collision
and comprehensive coverage on it. Cars worth less than $1,000
are often not worth repairing. If you have an accident where the cost
to repair the car exceeds its fair value, the insurance company will usually
opt to "total" the car. That means your car is labeled a "total loss"
and the insurance company is only obligated to pay you the "Blue
Book" value minus your deductible, rather than paying the higher
amount necessary to fix the car. They also will no longer insure the
car, so you’ll be left looking for a new set of wheels.
Many insurers will give you a significant discount (up to 10%) if you
hold more than one policy with them. So, look into buying both auto
and home insurance from the same insurer. Whichever company you
choose, make sure you investigate all possible discounts. Some insurers
will knock off a few dollars for safety devices such as airbags
or anti-theft devices such as passive engine disablers.
Oddly enough, paying a little more for your policy can save you money,
too. Most policies, for a few dollars per month, will pay for a rental
car should your car be damaged and unusable. This can be a big savings,
so it’s something to think about. Something else to include is coverage
that protects you if an uninsured or underinsured motorist hits
you.
Most policies offer a degree of coverage
in this area, but it might not be as much as you need or want.
And finally, do some comparison-shopping! Don’t assume that the price
differences among various insurers are small, because they’re often not.
