There
is a very good chance that you are — this very moment —
paying too much for your car insurance. There is an even better
chance that you could get a better rate, from another insurance
company, than you could from your existing insurer.
So why not take an hour or so and review your policy for potential
savings? Or, if you're fed up with the high insurance rates from
your current insurer, shop around for a new company.
The Internet has created increasing competition between car insurance
companies. It is easier than ever for consumers to shop for low
insurance rates, to analyze coverage and compare premiums. Still,
studies have shown that people don't shop around for insurance in
the same way they might shop for a new car. Also, people tend to
stay with the same car insurance company for years. Why not prove these
studies wrong? Put the power of the Net to work for you and save
money in the process.
You
can save on auto insurance in five ways:
- Make sure
you get all discounts you qualify for
- Keep your
driver's record clean and up-to-date
- Adjust
your coverage to assume more risk
- Drive a
"low profile" car equipped with certain money-saving safety
features
- Shop around
for a good, low cost insurance provider
First, let's
look at the discounts you might qualify for. Discounts fall into
a number of categories:
- Low-risk
occupations
- Professional
organizations
- Combined
coverage
- Discounts
for safety features
- More risk
assumed by driver
- Discounts
for senior citizens
Low-Risk
Occupations
Insurance is a numbers game. Adjustors collect information about
what types of people get into accidents. Over the years they see
a trend. Drivers that work as engineers tend to get into fewer accidents.
Why? It would be fun to speculate about the reasons (pocket protectors
— need we say more?) but the insurance companies don't really
care about that. All they know is that, in fact, engineers are a
low risk. Since there is less chance that they will wrap their cars
around the trunk of a horse chestnut tree, they charge engineers
less for insurance. Simple.
But you say you are a teacher instead of an engineer? You might
still be in luck. There may be discounts for teachers. You never
know unless you ask — and unless you shop around. Not all insurance
companies are the same.
Professional Organizations and Auto Clubs
Have you ever been about to pay $100 for a hotel room, only to discover
that a AAA discount saves you 15 percent? Now you're paying $85
and feeling proud of yourself. It's similar in the insurance business.
Affiliation with AAA — and certain other professional organizations
— will lower your rates. You should check with your employer
to see if there are any group insurance rates. At the same time
try checking directly with the insurance company representative
when you inquire about the cost of policies.
Combined
and Renewal Discounts
A big source of savings is to insure your cars with the same company
that insures your house. Make sure you ask if combined coverage
is available. This will lower your payments on your car insurance
and make your homeowner's policy cheaper too.
It's also important to make sure you are getting a "renewal" discount
that many car insurance companies offer. This is a discount given to
people who have been with the same insurance company for an extended
period of time. If you have carried insurance with a company for
several years, and not had an accident, your insurance company likes
you. Think about it. You paid them a lot of money and they didn't
have to do anything except send you bills and cash your checks.
True, they were ready to do something if you got in an accident.
But you didn't get into an accident so they're happy and want to
continue their relationship with you. A renewal discount is a good
incentive to urge you to return. And it's a good reason for you
to stay with them.
Discounts for Auto Safety Features
Auto safety features will also lower your payments. Heading the
list of money saving safety features is antilock brakes. Certain
states — such as Florida, New Jersey and New York — encourage
drivers to buy cars with antilock brakes by requiring insurers to
give discounts. Check to see if you live in such a state, or if
the insurance company you are considering gives a discount for this
feature. Automatic seatbelts and airbags are also frequently rewarded
with insurance discounts.
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.
For example, a common deductible amount is $500. This means if an
accident you're in causes $1,500 worth of damage, you pay $500 and
the insurance company pays $1,000. You could, however, set your
deductible to $1,000. This still covers you against heavy losses,
but it may decrease your monthly premium by as much as 30 percent.
As a final note, if you are being strangled by high insurance costs,
keep this in mind when you go car shopping next time. The more expensive
and higher-performance the car is, the higher the premium will be.
This is particularly true of cars that are frequently stolen, or
are expensive to repair. The insurance company keeps this in mind
when setting its insurance rates for this vehicle. Shop for a
low-profile car and get your kicks in other ways. You'll love the savings you'll see on your auto insurance.
