INSURANCE
Get the Most for Your Auto Insurance Dollar
The shaky economy has consumers searching for ways to cut costs and save money.
Fortunately, there are a number of proven ways to save on auto insurance. Here
are eight tips for getting the most for your auto insurance dollar.
1. Ask for a higher deductible
Your deductible represents the amount of money you pay before your insurance
policy kicks in when you have a claim. By requesting higher deductibles, you
may be able to lower your costs substantially. Keep in mind that claims occur
on average only once every 11 or 12 years.
2. Before you buy a car, compare insurance costs
If you are in the market for a new car, get an insurance quote before you buy.
Your premium is based in part on the vehicle’s sticker price, the cost to repair
it, its overall safety record and the likelihood of theft, so some cars and models
will cost less to insure than others. Many insurers offer discounts for features
that reduce the risk of injuries or theft. These include air bags, anti-lock
brakes, daytime running lights, and anti-theft devices.
3. Reduce coverage on older cars
Consider dropping collision and/or comprehensive coverage on older cars. As a
general rule, it does not make sense to pay comprehensive or collision on a car
worth less than $1000 as any claim payment you receive would not substantially
exceed your premiums, minus the deductible. Auto dealers and banks can tell you
the worth of a car, or you can look it up online at Kelley Blue Book, kbb.com.
4. Buy your homeowners and auto coverage from the same insurer
Many insurers will give you a discount if you buy two or more types of insurance
from them. Also, you may get a reduction if you have more than one vehicle insured
with the same company. Some insurers reduce premiums for long-time customers.
5. Maintain good credit
Your credit rating may affect what you pay for insurance (along with the cost
and availability to finance the purchase of the car), so keep a close eye on
it. Using credit ratings can make insurance rates more accurate, fair, and objective.
While the use of insurance scoring varies from state to state and company to
company, it is a fact that drivers with long, stable credit records have fewer
accidents than drivers who don’t.
6. Seek out safe driver discounts
Companies offer discounts to policy holders who have not had any accidents or
moving violations for a number of years.
7. Take advantage of low mileage discounts
Some companies offer discounts to motorists who drive a lower than average number
of miles per year. Low mileage discounts can also apply to drivers who carpool
to work.
8. Inquire about other discounts
These may include good student discounts for young people who take drivers education
and/or get good grades and defensive driving courses.
— Source: The Insurance Information Institute
Photo: ©istockphoto.com/Kativ
