How Much Can You Save on Your Car Insurance?
In the car insurance industry, premium costs are based on both non-changeable risk factors, such as your age, gender and location, and controllable factors, such as your credit score, driving history and the type of vehicle you own. While upping your credit score, buying a safer car or avoiding accidents will help, there are easier and faster ways to save money on car insurance.
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Raising Your Collision and Comprehensive Deductibles
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Lowering your collision or comprehensive insurance deductible can drastically lower your premiums, and it only takes a phone call or short visit with your insurance agent or broker. The Insurance Information Institute suggests that you upgrade to a $1,000 deductible, which will save you 40 percent or more in monthly premiums. If you are worried about a higher deductible at claim time, try switching from a $250 to a $500 deductible, which can save you between 15 and 30 percent, according to the III.
Dropping Comprehensive and Collision Altogether
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A higher comprehensive and collision deductible can help you rake in the savings on your next car insurance bill, but many consumer watch groups recommend dropping it altogether on older vehicles. The drop-off rule varies, but the III suggests you cancel a policy on any vehicle worth less than $1,000, while Kiplinger and Edmunds rule it out for cars worth less than $2,000. In either case, it may not be worth your while to keep a comprehensive and collision plan on a car that's aging, as your actual cash value will not equal the amount you are paying in premiums.
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Combining Policies
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If your car insurance policy is through one insurer but your homeowner's and life insurance is with another, consider combining all three for added savings. Many insurers will throw in a discount if you combine two or more types of policies. If you are married, you should also consider combining insurance policies with your spouse, which can save you between 10 and 30 percent in premiums.
Meeting Minimum Requirements
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As of 2010, no U.S. states require comprehensive or collision coverage, but nearly all states require liability insurance. A few states also mandate that drivers buy personal injury protection and/or uninsured motorist coverage. To save money, consider meeting your state's minimum requirements, which may be much lower than your current plan. Keep in mind that if your car is financed or leased, your bank lender may require certain coverage until the loan is paid in full.
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