Three Great Ways Save on Auto Insurance Costs

Three Great Ways Save on Auto Insurance Costs

 

When people are shopping for auto insurance, most will get a handful of quotes, select a company and a rate they’re comfortable with, and continue renewing their selected policy for years afterwards. Rarely do they review the policy to make sure it provides them with enough coverage, and even more infrequently do they check to make sure they aren’t overpaying for the policy. If it’s been awhile since you took a hard look at what you are paying for auto insurance, now might be a good time to do so. With very little effort, you can achieve maximum savings on policies that you’ve already established.

Raise Your Deductible

A deductible is the amount you have to pony up after an accident and before your insurance coverage kicks in. Most people carry a deductible of around $200. However, if you’re a careful driver who hasn’t needed the policy for collisions or accidents in years, the first great way to reduce your auto insurance payments is to raise your deductible.

The higher your deductible, the more you will save on auto insurance, particularly in collision and comprehensive line coverage. If you raise it from $200 to $500, you’re looking at pocketing at 15-30% savings. Similarly, if you raise it to $1000, you might save over 40%. Remember, however, that whatever you raise it to—if you are ever in an accident, you’ll have to write a check to your insurance company for that amount. So don’t raise it to an amount that you aren’t comfortable paying, and definitely don’t raise it to an amount that you can’t afford to pay.

Drop Unnecessary Coverage

The next way to save on auto insurance requires you to do a little homework. Dig up your policy papers and see where you can drop coverage that you no longer need. If you have an older car, which now has a much lower market value than it did when you originally bought the policy, consider reducing your collision coverage limits. Collision coverage pays to repair your own vehicle after an accident, and is generally one of the most expensive parts of an auto insurance policy.

If your car is damaged in an accident, because your insurance company will only pay an amount equivalent to the market value of your vehicle, there’s no sense in covering it beyond its worth. To determine the monetary value of your car, do some research on sites like Kelley Blue Book or Edmunds.com. If you have a very old vehicle, something that might be worth a lot to you, but very little on the market, consider dropping collision coverage altogether.

Communicate with Your Insurance Company

If you’ve made any changes to your vehicle after you bought it, make sure your insurance company knows about it. Added safety features like alarms, specialty airbags, and backup cameras, can have an impact on your payments. Insurance companies take safety features into account to calculate the likelihood that your car will be stolen or that you will be in an accident. The less risk they detect, the lower your payment will be.

Many insurance companies also offer discounts for factors like age, a student’s grades, combining policies, staying accident-free, and having roadside assistance like AAA. Because these discounts are changed and added to frequently, it’s important to talk to your insurance company regularly to see which ones you might qualify for. Don’t be afraid to bring up discounts that other insurance companies offer either. If they’re afraid they might lose your business, you’ll be surprised at the savings you could earn.

This guest post was provided by Brittany Larson of Audi Warwick.

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Comments

  1. Brigid Cermak says:

    One way NOT to save on auto insurance is to get in an accident–my boyfriend got in one recently and his rates almost tripled!

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