Tuesday, January 15, 2008

Save some money by switching your car insurance to...

Ha!! I bet you were expecting me to name that insurance company with the reptilian mascot with a really bad Australian accent (Australian accents are way cool, just not the one with the little green guy). Sorry, but I don't want to get sued (definitely not going to be saving money that way, right?). Ok, seriously though, car insurance is something we all need, and in most states, are required to have. So how do you get the most chitty-chitty bang-bang, for your chitty-chitty buck-buck?

There's a couple things you can do. First, be a good, safe driver, and do not have any teenagers in your house that can drive. Those two tips alone will save you hundreds, if not thousands of dollars. But, I see how most people drive on a daily basis, and sooner or later, most people will have a teenager, as they are an almost inevitable by-product of a very popular and enjoyable activity that I don't see anyone stopping anytime soon. So how else can you save some money on your car insurance?

Start by shopping around. Keep in mind though, you want lowest possible premiums, for highest possible coverage. Also, do not go by discounts alone. You might get a lot of discounts from one company, but still get a lower cost from another one that doesn't give discounts. Take some time to shop around online. While you may not get a personalized quote, without giving up some personal information, you can get a rough idea on what the average person is paying at each of the different insurance companies. Just remember, yours may be higher or lower, based on coverage selected, driving history, credit history, claim history, type of vehicle, age of vehicle, and a myriad of other factors. Just use the online quotes as a means of creating a baseline, to point you in the right direction.

Having a higher deductible can save you some significant money (and SAVING MONEY is MAKING MONEY!!). A lot of people opt for the lower deductible ($250, for example), thinking that if they need to use the insurance, they will pay less out of their pocket with the lower deductible. If you have an emergency fund established, try for a $500, or even $1000 deductible. With a higher deductible, you'll save more - sometimes 15-40% more. If you pay $1000 a year, and you saved 40% by switching to a $1000 deductible, your savings would equal your deductible in about 30 months. By staying with the lower deductible, after 30 months, you would be paying an extra $400 a year for the convenience of only paying $250 out of your own pocket, if you are involved in an accident? That makes no financial sense at all.

Consider the age and condition of your car. Perhaps even have it appraised. If it is older, and well used, it may not be worth having the comprehensive and collision coverage on it. No sense paying extra to replace your car if it's totaled, if it's a $1000 beater.

Check with your employer to see if an insurance company will offer a group plan through your place of work. Also, ask your insurance company if they offer discounts if you carpool, or drive fewer miles per year than the average driver (less time driving, means less chance of being involved in an accident).

Check out companies that offer multiple lines of insurance. If you combine homeowner's/renter's/life/disability/etc insurances with your auto insurance from one company, you may be able to get reduced premiums on all of them.

Finally, just ask for discounts. Find out what they offer. Some companies may offer discounts for no accidents or speeding tickets in a set period of time; students with good grades; completion of a defensive driver course (and not a court appointed course...take it BEFORE you get a ticket); certain safety equipment (air bags, ABS brakes, etc); anti-theft devices and so on. You won't know until you ask, and it just might make your wallet happy!

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