How to Save on Car Insurance With a Higher Deductible
If you are like most people, you are probably paying a lot for your car insurance. Therefore, any reduction in the cost will probably be quite helpful. But did you know that by raising the deductible on your policy, you can actually lower your premiums? The theory is that raising the deductible makes you less likely to file a claim, which benefits the insurance company because they do not have to put out any money. As a result, your rate is reduced.
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Instructions
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Contact the lien holder that holds the title of your car, and ask if there is a maximum deductible requirement. If you are financing or leasing a car, some banks will require that you have a deductible that does not exceed a certain amount. Lien holders prefer a lower deductible because, if it is too high, you may not be able to afford to pay it in the case of an accident and decide not to follow through with fixing the car. If you own your car outright and no banks are involved, then the sky is the limit.
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Place a call to your car insurance provider and ask for information pertaining to deductibles. Your agent should be able to provide you with a list of the deductibles that are offered. Along with this information, a breakdown of the differences in premiums in relation to the cost of the deductibles should also be supplied.
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Decide which deductible will save you the most money on your premiums. Your rates may decrease along with the added responsibility of a higher deductible, but you must first ask yourself if you can truly afford the extra costs if you do become involved in an accident, before you officially make any changes.
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Take your time. Changes to any type of an insurance policy are a big deal, especially when it comes to your auto coverage. Think about the reasons why you want to make a change to your deductible and if the reduction in premium is worth it. You may have a change of heart and wind up happy that you did not make the change after all.
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Seal the deal and sign the change of insurance form. In most cases, the changes to your auto insurance policy can be made right over the phone. The agent will then send you the form denoting the changes made, and it will require your signature. Sign it and send it back.
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Tips & Warnings
While you are discussing deductibles with your agent, it may be a good time to review other parts of your policy, especially if you have had the same coverage for awhile. There may be new amendments that you are not even aware of that can offer you more protection. Life changes that have not been addressed yet on your policy may also save you money.
If you are married, do not make any changes to your auto insurance policy without discussing it with your spouse first. An insurance change that could affect another individual besides you could pose a problem if your spouse is not made aware of it. All drivers in the home under the same policy should be kept informed about any major issues involving the policy.
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- Photo Credit Jonae Fredericks
