How To Save On
It seems like the vast majority of people take little interest in their auto insurance. Well, they're flushing money down the toilet. It may be boring, but spending a few minutes here to review the key factors will put hundreds of dollars into your pocket. Actually, it will run into the thousands in no time.
So, let's jump right in to show you just how simple saving this money is. Oh, and if you pay your premiums annually or bi-annually, your car insurance company should be mailing you a refund soon.
Too Low A Deductible:
If you have a $100 or $250 deductible, you're taking a terrible beating (your insurance company LOVES you though). This is one of the most expensive parts of your coverage and you can easily save 30% to 40% right here. Just look at the math:
As an example, let's say that you would save $300 a year by switching to a $500 deductible. Well, if you have an accident as often as once every three years, you would have saved $900 in premiums and received $400 in extra deductible coverage once. So, you're a full $500 ahead! You'd have to get into an accident more than 2 times every three years for this to make sense financially.
And even then it wouldn't work because with a driving record like that, the insurance company would raise your premiums through the roof.
How many accidents have you actually had in the last 10 years? Let's say you had one. You would have pocketed $3,000 in premium savings and received $400 extra once, for a net gain of $2,600. That's not chump change. Let's say you even had 3 accidents ... you'd still be $1,800 richer.
Too Much Property Coverage:
Your $100,000 Property Damage coverage ISN"T for your car. It's for damage caused to telephone poles, fences and what have you. Where do you drive? Are you driving into homes? Even then you'd be hard pressed to cause that kind of damage.
You can drop this coverage down to $50,000. If you have very little net worth, you can even go to $25,000.
Car Safety Related Features:
Most people know that they can get discounts for one or two safety factors. But there's actually a whole bunch. Is your company even aware that you may qualify for these? Let's review the list:
Front And Side Air Bags
Automatic Seat Belts
Safe Driver Status (usually 3 years)
Vehicle Driven Under 7,500 miles Per Year
Good Student Status
Car Parked In Garage
Multi-Policy Discount (home and car)
Make sure your insurance company is aware of any of these you qualify for.
Too Much Bodily Injury Coverage:
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Most companies automatically set this at $100,000. But it should depend on your net worth. If the value of your net assets is $50,000, there's no sense in paying to protect $100,000 of assets, so you could drop it to $50,000.
If you have little or no net worth, you can opt for the minimum coverage (usually $25,000).
Uninsured Motorist Coverage:
Most people think this covers you if you get hit by someone who doesn't have insurance. Well, you're actually already covered for this. Yep, you're covered by the Collision coverage of your policy anytime your vehicle gets hit ... insured or not.
This only covers you if the other driver is uninsured and your own insurance isn't enough to cover it. This coverage is so flimsy only about a dozen states mandate it. Agents in the other states just tack it on anyway and get away with it because consumers just don't understand it.
Bottom line? You can drop it. If you have to have it in your state, get the minimum.
Why? If you already have a health plan for family members, there's no reason to pay for this one too. Non-family members in the car are covered under your Bodily Injury coverage and under their own health plans. So, if you have a health plan, you're free to drop this one.
Death, Dismemberment And Loss Of Sight:
Why? Again, if you've got life insurance, you've got all this. So, why pay for it again? These are overpriced benefits tacked on that most people never question. If you don't need it, you don't need to pay for it.
Does part of your vehicle's Manufacturer's Warranty already include this ... free? Then you can drop it from your policy. If you are a AAA member, then you also don't need to be paying for this. If you're not an AAA member, become one. It's cheaper and has many more benefits.
Car Rental Reimbursement:
Again, another overpriced extra that's rarely used. Most companies have a number of restrictions on it. And when it can be used, there's usually a maximum daily rate allowment of about $30.
Let's say you're paying $75 a year for this. Well, in ten years that's $750! Just rent a car (or borrow one) the time or two this happens and you'll keep all or most of that $750 in your bank account.
What To Do Now:
You absolutely have to get competitive bids from multiple companies. This is the "Cardinal Rule" in the insurance industry.
It's simply the most important thing to do to get the best price. How do you know if your own company is even competitive price-wise? This is a very competitive industry and you will see large differences in prices for the exact same coverage.
In addition, getting a price quote on the internet is often automatically lower than going through an agent. And because of the competitive nature of this industry, many companies will also add in an additional 10% to 20% discount as a "new customer" bonus.
Here's The Easiest, No-Hassle Way To Get The Best Rates:
Here's a website that will give you side-by-side quotes from the industry's top insurers. It's simple, fast, eye-opening and free. Here's the link: TheZebra.com
What I like about them is that it's free and you're under no obligation of any kind. A real time and hassle saver. Even if you don't need coverage immediately, you can save the quotes for when you do need it. And you can also simply take the best quote and ask your existing company to match it.
In addition, esurance is also one of the best online, so be sure to get a free quote from them as well.
The internet has truly leveled the playing field when it comes to car insurance. Have fun taking advantage of it!
All the best - Josh
Please note: I am not a lawyer or an insurance expert. The above simply represents my own opinions. You should do what you think is best for yourself.