Monday, July 28, 2008

- Cut Your Auto Insurance Premium

We all spend weeks looking for and researching the perfect car. But when it comes to insuring that car, many people don’t take the time to put the same effort into researching insurance options. Almost all states require insurance, so we know we need it, and very few people are willing to take the risk to not have insurance. Your car may not be worth a lot, but the Lexus that you just rear-ended is.

A survey taken in January 2002 by Progressive Insurance found that 58% of car owners didn’t shop around for car insurance. Another 29% said that they did their research – at one point – but hadn’t looked around in over five years.

The following tips will help you know what to look for when shopping around for car insurance, or how to stay with the company you are with, but lower your premium:

· Know what type of insurance you are buying. “Duh,” you say. Well, not really. Rather than simply buying car insurance to cover you up to a certain amount, you can buy many types of car insurance. Collision, comprehensive, uninsured motorists, and bodily injury are some examples of types of insurance. You made need all, or may just want to buy a few. Know what you are buying and get only what you need.

· Become a better driver. Auto insurance companies want to take in as much money as possible, and pay out as little as possible. If they feel that you are a good driver, they will often give you a discount. Have a clean driving record for more than three years, taking a defensive driving course, and for younger drivers taking Driver’s Ed and even keeping good grades can make a difference in how much you pay.

· Make your car as safe and theft-proof as possible. Buying a safe and theft-proof car would include things like the car having air bags, anti-lock brakes, and a security system. Owning a car that can be easily stolen or more attractive to thieves (expensive cars; cars without ignition and fuel cut-off systems, hood and wheel locking devices or window ID systems, etc.) will increase your premium as well.

· Be a good customer. Many companies will give you a discount if they consider you a loyal customer. This would mean that you would insure more than one car, add homeowner’s or life insurance, or stick with them for over five years. This does not mean that you should sit on your car insurance without looking around and making sure that you are still getting the best insurance. But if you are happy with your company, they are happy with you. Check and see if they will give you a discount every year that you stay with them.

· Increase your deductible. Like many insurance companies (life, homeowners, etc.) the higher your deductible, the lower your premium. If you are able to raise your deductible and put that money away for emergencies, then they will most likely reduce the cost of insurance. Make sure, though, that you have the money set aside to cover the deductible. If you can’t pay the deductible, they aren’t going to help you. They do not start paying until the deductible is met.

· Make sure you know your discounts. Find out about discounts that companies offer. Aside from owning a car with better safety features, some insurance companies will offer discounts for things such as: low annual mileage, having what they consider a low-risk occupation, keeping your car in a garage, living in a rural area, carpooling, or even being married or a senior citizen.

Make sure you know companies you are researching inside and out. They do a lot of checking on you, do the same with them. Check Consumer Reports, Standard & Poor’s Rating Service, or ratings offered by your state on local insurance companies. It isn’t important just to have the cheapest coverage. You’ll also want to see how quickly they handle claims as well as how good their customer service is. If you’ve been in an accident, you know that you will spend way too much time on the phone with your insurance company. Not getting calls back, or having to go through the rigmarole of them “finding your file” is not worth saving an extra $20/year.


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