Car Insurance is something that most people need, but what most people don't like about it is the ever increasing premium costs.
Due to the increasing incidents of insurance fraud, honest people are being penalized with higher and higher rates. If you are determined to save money, there are a few ways to combat the high cost of auto insurance without resorting to actions of questionable legality.
Be Relentless In Your Search For Better Rates
This might seem obvious, but there are many individuals who simply accept the rate that they currently have. By calling every local insurance broker in your area, you might find that you can get a better insurance rate.
Don't Forget Your Discounts!
Don't forget to ask about (or make sure you are getting) discounts. Some of the more common discounts include:
- Multiple Policy Discounts – These discounts are for multiple vehicles insured under one policy or if you insure your home and belongings under the same policy as your vehicle. The savings could amount to 5% up to 20% on your car insurance rates.
- Restraint System Discounts – These are sometimes referred to as seat belt or airbag discounts. Often you will be asked if your vehicle has a passive restraint system, such as airbags or factory-installed motorized seatbelts (common on older cars).
- Anti-Theft Device Discounts – This is a discount for individuals with an anti-theft device (security system).
- ABS Discounts – If you have anti-lock brakes (ABS), often times you are eligible for a discount.
- Safe Driver Discounts – If you take a safe driving or defensive driving course, most insurance companies will offer you a discount. You also might be able to receive a discount if you have a good driving record (no tickets or accidents).
- Good Student Discounts – Believe it or not, being a good student can be more rewarding than just having good grades. You may also be eligible for discounts on auto premiums provided that you meet certain minimum requirements.
- Retirement Age Discounts – There are more and more insurance companies now offering discounts to individuals 55 years or older and who are no longer employed.
- Farm Discounts – You may be eligible for a discount on you car insurance if your main occupation is farming or ranching.
- Economy Car Discount – Certain types of cars are eligible for insurance discounts.
- Utility Vehicle Discounts – Some types of pickup trucks are also eligible for insurance discounts.
- Association Discounts – Being a member of an organization or the military can have its privileges. If you belong to the military, a credit unions, or a teacher's association, you may qualify for significant discounts on your car insurance premiums.
Take A Second Look At Your Deductible
When is the last time you met your deductible on your car insurance? While it is impossible to predict when you will be in a car accident, you might consider raising your current deductible(s) to the maximum allowed so that your premium payments drop. This can be an especially good idea if you are a good driver (and be honest with yourself about that assessment).
If your current deductible is $500, check with your auto insurance company. You may be able to raise it to $1,000 or $1,500. This could end up saving you a surprising amount of money every year.
If you have a car that's older than 5 years, and you really want to save some dough, consider dropping collision insurance altogether if you still have it. For many cars, 5 years marks the point when the car's value reaches its "salvage worth" if it is ever in any sort of serious accident, so carrying collision insurance can be a complete waste of money. Also consider lowering your liability insurance to the State minimum. Many individuals are unaware that when they insured their vehicle, they were given more liability insurance than the bare minimum that is required.
What do you do with all of this money you've just saved? Well if you put it away in a high yield savings account, it will be in your pocket when you need it instead of the insurance company's. As always, how you choose to approach this issue depends entirely on your specific financial situation. For some, raising deductibles is a smart move. For others, it's not. Shopping around for cheaper car insurance can really put some money in your pocket, but if you're committed to your insurer, you may decide that you're better off paying the higher premium for the service you want.
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