How to save on auto insurance

KNOWING how to save on auto insurance is important. Over time, the savings could be a lot of money. Here are some good tips on how to save on auto insurance:

#1 Have appropriate coverage

Common sense would tell you to minimize coverage to save money. But of course, you should not be overly minimizing what is covered so as not to be thrown into deep financial setback when  catastrophe happens.

A sample coverage is bodily injury. It is used to help pay somebody’s injuries in an accident for which you are found guilty. In the case of California, the mandated minimum is only $15,000 / $30,000. The first number means the limit the insurance company will pay per person injured. The second is the total amount the insurance company will pay per accident. Now ask yourself if the injured needs emergency and hospital stay, will the $15,000 be enough? Remember that you’d be liable for the amount the insurance is not paying. If you seldom use the car, you only drive on local roads, a relatively low coverage is fine. But, know that bodily injury coverage is supposed to also cover other costs like legal, loss of income and even funeral costs. Therefore, determining appropriate coverage requires that you understand how much financial risk you are willing to be responsible for beyond the limits of your auto policy.

#2 Reduce coverage on old cars

The advice is especially relevant when renewing policies. We can just be renewing the policies and unmindful of the need to adjust coverages especially for the older cars. Oftentimes, since old cars don’t have much value anymore, you can drop the collision and comprehensive coverages altogether. Most standard policies will not pay more than the current value of the car even if the repair costs will be more than that. Therefore, you may like to compare the collision and comprehensive premiums against the current car value to decide to keep or drop those coverages.

#3 Bundle with your home policy

Bundling with your home policy can save you up to 20%. Some homeowners do not bundle because they don’t know this huge savings. Some do not know that the insurance impounded in the mortgage can be replaced and hence never enjoyed the savings. At times, true, the home policy from the same insurance company as for the auto policy is not cheaper than the cheapest home policy. Yet, the bundled premium tends to be cheaper most of the time.

#4 Ask for discounts

Ask your insurance company what discounts you are entitled to. Premiums are normally high for young drivers. But if they are good students, they get good discounts. Or if they are schooling more than 100 miles away from home and are not driving while at school, they can also get great discounts. Drivers who are US college graduates, who are in certain professions like registered nurses or doctors, who are self-employed, or who are engineers or scientists may also have certain discounts. Different insurance companies give different discounts. Ask for them!

#5 Report low mileage

A significant factor in premium is mileage. The more mileage you put into your car, the higher is your risk. Therefore, insurance will demand for more premium to cover that higher risk. When you change job and you commute less, report that to your auto insurance company to have the premium lowered. Or when you retire. Or you become unemployed. These life events can lower your mileage consumption and hence lower your auto premium.

#6 Shop around

There are several ways to shop for auto insurance. You may want to inquire directly or go through an agent. Insurance companies may have their own captive agents, or they may have independent agents representing them. A lot of these independent agents represent multiple companies. They can be your personal shopper, looking for the cheapest insurance for you while saving you time.

Among these different tips on saving on auto insurance, shopping around can save you the most. You’d be surprised how different companies can price the risks so differently for the same coverage. But before you settle for an independent agent who would do the shopping, know his competency in helping you determine appropriate coverage first. Also, can he get you the most discounts? What companies does he represent? Select an agent who is on your side.

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For more information, please contact Joseph Doratan at 855-955-1800 or [email protected].

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