Tuesday, September 11, 2012

How to lower your car insurance bill

With money being tight these days, we're all looking for ways to make make our dollars stretch. . With the cost of auto insurance rising, saving money on car insurance can prove to be  worthwhile so I've compiled a list of some of the best practices on finding cheap car insurance.

Shop Around on Car Insurance 

Every insurance company has a team who determine rates based on many factors such as age, driving experience, zip code, vehicle, coverages and more. Since each company determines their own rates on multiple factors, there are millions if not billions of rate effecting combinations. . If you and I were to shop 3 different companies, chances are that the same company will not offer both of us the best rate. Companies also have their niches that they concentrate in being competitive and will often times out price themselves if you don't fall in their desired client base. Also, competition drives down prices so shopping around will ensure that you take advantage of this.

Combine Household Vehicles 

My husband and I do this  our 2 cars in our house.   Almost every company will give about a  multi vehicle discount usually around 20%   if there are at least 2 vehicles on a single policy. Too often, people in the same household, even  spouses , will purchase separate policies to better track their expenses. This is just as good as throwing money in the garbage because each one will be paying an additional 20% for auto insurance so it is highly recommended to combine policies. Most companies will allow all vehicles garaged in the same house to be on one policy even if the people are not related, such as a boyfriend and girlfriend living together. 

Apply All Discounts for Auto insurance 

Instead of waiting to be offered discounts, ask about them. The fact is, your car  insurance carrier may not know that you just got married or you finally took that driver's education class - both of which could dig up some savings for you.
What else could help you save? Here's a partial list of possible discounts:*
  • Low-Mileage Discount: applies when you drive less than 10,000 miles per year, (I take advantage of this since  I work at home drive about 5-6k miles a year)
  • Good Student Discount: generally requires a B average for a full-time student
  • Anti-Lock Brakes, Anti-Theft Device, or Air Bag Discount: usually must be factory installed
  • Driver Education Course Discount: applies when you complete a defensive driving course
  • Bundled Insurance Discount: applies when you have auto, home, or renter's insurance with the same company. We have all of our insurance through one company. It saved us  $500 a year total between the 3 companies.
  • Car Insurance Discounts for Public Transit Users many insurance companies will provide  a discount if the car owner purchases a train or bus monthly pass. 

Get Correct Coverages for your Car Insurance 

If you lived in a 100-year-old shack, you probably wouldn't pay a lot for home insurance, right? Same goes for an older  car, yet many people neglect to drop coverage that they'll likely never use. Consider dropping collision and/or comprehensive coverage - which protects your car in the event that it's damaged - if you drive an older car.If your car is worth less than 10 times the premium, purchasing the coverage may not be cost-effective 
If you file a claim, a deductible refers to the amount you pay before your insurance policy covers it. If you have a higher deductible, your insurance premium could be lower. And the potential for savings might surprise you.
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,
But remember, before increasing your deductible payment, make sure that you have enough cash  in your emergency fund to pay it in case you do have to file a claim.

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