Monthly Archives: April 2017

Reduce Auto Insurance Costs

When was the last time you took a good look at your auto insurance policy? Most likely, the answer is ‘never’ – or at the very least, ‘not for a long time.’ You’re not alone. The majority of folks renew their policy without giving it a thorough look, even when premiums rise. But those few minutes to review what kind of coverage you have and what you actually need, can save you money.

Here are a few things to consider if you’re looking to reduce your costs:

The deductible is the amount of money you have to dish out before your insurance policy takes over. By increasing your deductible to $500 from, say, $200, you could lower the cost of your collision and comprehensive coverage by 15 to 30%. Increasing it to $1,000 could decrease that cost by at least 40%.

Avoid Duplicate Medical Coverage
Most insurance policies have an option for personal injury protection and medical coverage. But if you have an existing health plan, you may be paying extra for double coverage. Purchase only the minimum which is required by your state. One word of advice, though: check with your health and medical plan to make sure that policy will cover injuries incurred in auto accidents.

Drive a Lower-Profile Vehicle.
The belief that car color bumps up your premium is false. However, owning a car that is a target for theft, expensive to repair or has a less-than-stellar safety record can easily boost your costs. Car insurers are more interested in the make and model, year, body style, engine size and, in some areas, location (street parking versus driveway/garage-kept vehicles, for instance).

If a car falls under the “sports car” category – two seats, lots of horsepower, performance engine, high-end wheels and racing tires – expect to pay more. Insurers see these vehicles as higher risk for accidents (drivers tend to use the speed potential, also increasing the potential for getting traffic fines), more damage (sports cars tend to be smaller than family sedans) and higher maintenance costs (sports cars usually are equipped with unique or high-tech parts which make them costlier to replace).

Bundle Your Coverage
Many companies offer discounts for multiple policies. Ask your insurance carrier what the price difference would be if you combined your auto, homeowners and/or life insurance policies. If there are no discounts, consider shopping around. (To learn more, see Bundle Your Insurance For Big Savings.)

Consider Safety Options for Your Vehicle
Most newer vehicles include safety options, such as anti-lock brakes, air bags and automatic seat belts. But auto insurance companies take into consideration extras when determining your costs. Alarm systems, anti-theft devices, daytime lights and passenger-seat air bags can help reduce your premiums.

Maintain a Clean Driving Record
Driver behavior is a big factor when it comes to insurance costs. Moving violations, like speeding or reckless driving that result in “points,” certainly affect the cost of premiums.

Ask About Other Discounts.
You shouldn’t be shy when it comes to asking questions about auto insurance. Many companies offer reduced rates for folks over 50 or 55 years of age, if you have a clean driving record or have been a longtime customer. There may also be discounts for customers who complete a defensive driving course refresher (many states offer it online), teens who have completed a driving course through an approved driver’s education program, teens who are included on your policy or students who attend college and do not take their car with them.

Before you agree to expensive collision and/or comprehensive coverage, ask yourself a few questions first: How old is your vehicle? What is the vehicle’s market worth? Sometimes this coverage isn’t worth it because a claim may not exceed the amount of the insurance policy or deductible. Likewise, if you might want to drop emergency road assistance coverage through your insurance company if you have an adequate plan with another program, such as AAA or through your credit card.

 

Spike Your Auto Insurance

You may already know the importance of shopping around to score the best rate on your auto insurance premiums, but did you know that certain factors (or the absence of them) could cause your insurance premiums to rise?

To understand what makes your insurance premiums spike, it helps to understand the basic nature of auto insurance: Insurers make money when they insure drivers who don’t have accidents, and don’t make claims. They lose money when the opposite happens. As such, it is in the insurer’s best interest to predict driver risk factors as accurately as possible. When any of the following factors are present in your life, they indicate an increased likelihood that you, as a potential auto insurance policyholder, may have an insurance claim that will cost the insurer money. To compensate for the increased likelihood of a payout, insurers charge you more money in the form of a raised premium. Here are six things that spike your auto insurance.

Buying a New Car
Because a new car as an asset is worth more money than an older model, it will cost more to replace. Additionally, if you finance or lease your new car purchase, most lenders require you to carry full coverage at a stated level, which makes it impossible to skimp or strategize only on the coverage you need. You can be wise about how your new ride will impact insurance premiums before you buy. According to a recent study by Insure.com, the cheapest new cars to insure tend to be larger, sturdy models such as minivans, SUVs and trucks. Don’t assume that premium boosts come only with a flashy sports car or other high-priced model. The study indicated that the Honda Civic, for example, commands higher insurance rates simply because it tends to be driven by younger, childless owners who are inherently deemed riskier than parents. Further, it’s one of the most stolen vehicle models in the United States.

Long commutes to work don’t just cost you in time and fuel; they’ll also boost your auto insurance premiums. Again, the risk is much greater that you’ll get into an accident when you’re driving during rush hour. Further, if you are in a profession that involves frequent driving, like a pizza delivery person or salesperson, you’ll pay for the increased time that you spend in the car because more time spent driving increases the risk of an accident.

Moving
Though actual risk is determined by the zip code you live in, city residents statistically have more accidents, which drives their premiums higher than those who live in rural areas. Additionally, more people living in an area means more claims, which is reflected in the higher premium prices in such places. If you’ve recently taken up residence in New Mexico, Alabama, Oklahoma or Florida, expect to pay higher premiums. According to the Insurance Research Council, these states have the greatest concentrations of uninsured motorists, which ultimately seeps into insured drivers’ premiums.

Marital Status and Age
If you’re unmarried and without children, you’re considered part of a higher-risk category than married couples with kids. If you’re 26 or younger, and male, you’ll pay even more.

Dumping Your Auto Insurance
If you ditched your auto insurance in an effort to save some money, you’ve committed a classic case of being “penny smart and pound-foolish.” Not having any auto insurance, even for just over 30 days, will cause your premiums to jump.

Having a Brush with the Law
Having no accidents or tickets will lower your auto insurance premiums and, as you might imagine, having either or both could raise them. When and if you’ll see the spike is largely determined by your locale and your insurance provider. Insurance companies use a “merit plan” system. Most insurance companies periodically scan for recent traffic violations, whether you are a new or existing customer. After you commit a traffic violation and your insurer learns of it, your auto insurance rates could be higher for the next few years.

 

Know Cheap Car Insurance For College Students

If you’re of college age – or have a college-age student in the family – you probably know it’s a terrible time to buy auto insurance.

First, teens have higher premiums because of their inexperience behind the wheel. Statistics show that automobile accidents are the #1 teen killer with more than 3,000 fatalities and nearly 450,000 injuries annually. Second, money is tight. A higher premium charged to somebody just starting off in life makes the payment feel even larger.

Before you resign yourself to paying massive monthly premiums, take some time to do a little shopping. Following these tips could lower the rate significantly.

Most auto insurance companies offer a discount for teens who have good grades. Normally somewhere around 10%, this discount is usually available to college students too – until age 25, depending on the company. That’s why it pays to get quotes from several insurers before making your choice.

Safe Driving

No accidents, no speeding tickets and no other trouble could mean a sizable discount. Some companies say that your discount could be as much as 45%.

Defensive Driving Class

Take a defensive driving course and save another 10% at some companies. The length of the classes varies but 10% can add up fast, especially if you’re a college student trying to save every dollar.

Stay on Your Parents’ Policy

In general, you can stay on your parents’ auto insurance policy until you permanently move out of your primary home. If you’re living on a college campus, that is considered a temporary residence. It doesn’t hurt to compare an individual policy to a family policy, but most of the time you will pay less by staying on the family plan.

Install an Anti-theft Device

Just because it’s a school doesn’t mean that it’s safe. Auto insurance companies will often give you a discount for an anti-theft device. The size of the discount depends on the type of device you install. Remember, if your car is going with you to college, you have to inform your insurance company; the cost of insurance depends on where the car will be located.

Add Up How Much You’ll Drive

If you’ll be living on campus more than 100 miles from home – and you’re not taking your car to college and nobody else will be driving it while you’re away – tell your insurance company. Your parents’ car insurance could drop as much as 30%.

On the other hand, if you’re commuting back and forth to classes – especially a hour or more each way – you might want to up your coverage since you’ll spend a lot more time in your car