Shop ahead
Before you buy your next car, check on insurance. Many people assume that SUVs
are expensive and Neons are cheap. This is not necessarily true. Some companies
will increase your liability based on the cost of damages your type of vehicle
may inflict � big trucks cause big damage. However, they also rate the autos
based on how likely they are to be damaged in an accident, how often they are
stolen, and how badly driver/passengers are injured. That Neon (or Jetta or
Honda) is going to be a lot more expensive than you think. Many companies will
have websites that will give you lists of safe and lower priced cars. (Saturn is
a low insurance car because it has dent-resistant doors.) |
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Assume More Risk
Two powerful ways to bring your coverage down is to assume a higher risk. This
is done in two ways. The most dramatic reduction can be realized by dropping
your collision insurance on an older car. If the car is worth less than $2,000,
you'll probably spend more insuring it than it is worth. The whole idea of
driving an older car is to save money, so why not get what is coming to you?
Another way to redesign your policy � and save money in the process � is
to ask for a higher deductible. The deductible is the amount of money you have
to pay before your insurance company begins paying the rest. In other words, you
pay for the little dings and bumps and let your insurance company pay for the
heavy hits. |
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Ask for Higher Deductibles
Deductibles are what you pay before your insurance policy kicks in. By
requesting higher deductibles, you can lower your costs substantially. For
example, increasing your deductible from $200 to $500 could reduce your
collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000
deductible can save you 40 percent or more. Before choosing a higher deductible,
be sure you have enough money set aside to pay it if you have a claim. |
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Reduce Coverage on Older Cars
Consider dropping collision and/or comprehensive coverages on older cars. If
your car is worth less than 10 times the premium, purchasing the coverage may
not be cost effective. Auto dealers and banks can tell you the worth of cars. |
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Insure your Home and Automobile with the Same
Company
Buying your home and auto insurance policies with the same company will give you
a discount on BOTH policies. Sometimes up to 10%. |
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Don�t Speed
If you get a speeding ticket, your driving record is shot and your auto
insurance rates are going to go up. To keep your auto insurance rates as low as
possible, you�ll want to keep a clean driving record and that means driving
safely and most important of all -- no speeding! |
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Avoid Filing Claims
If you file a claim on your auto insurance policy, chances are that your rate is
going to go up. The more claims you file, the higher a risk the auto insurance
company views you as. Avoid filing a claim and you�ll avoid auto insurance rate
hikes. |