I have worked just about every job in the insurance industry, from selling auto and property insurance to being a claims adjuster. I know the right ways and the wrong ways to save money on insurance premiums. I also know first-hand the consequences of playing with your deductibles to save a few dollars. The following are some wise tips to help shave costs off of your policy:
1) Do the obvious
First things first! You have to get some quotes from different reputable insurance companies. Our first year of marriage, we saved $500 per year just by switching to a different insurance company. If you’re a homeowner, get a quote on that policy too. Most insurance companies offer a multi-policy discount on home and auto premiums if you allow them to insure both.
2) Any high-risk drivers on your policy?
Do you have a driver under 25 in the home? Does someone on the policy have a speeding ticket or a D.U.I.? Ask your agent to rate the worst offender on the oldest vehicle on the policy. It will lower your premiums substantially. Rest assured that every licensed driver on your policy has coverage to drive any vehicle on the policy.
3) If you’re driving less, make sure to let your agent know
Part of your premium is based on the number of miles you drive annually. When I stopped working outside the home, the 25,000 miles I drove per year were cut in half. Making this change shaved a few dollars off of our monthly premium payments.
4) Cautiously review your deductibles
In the event of an accident, are you comfortable paying the first $500 towards the repair of your car? If so, raise your collision and comprehensive deductibles to that amount.
5) Cautiously review the value of your vehicle
If your car is roughly equal to or worth less than your deductible, you need to re-think the collision and comprehensive coverages on your policy. In the event of an accident, you may have paid all that money in premiums for nothing, literally.
6) Do you have a spare car?
Then it is time to re-think rental car coverage. No need to pay for a rental car which you may or may not need down the road if you have access to one right at home.
7) Gap coverage
Here’s a trick that will save you a lot of money. Gap insurance covers the difference between what you owe on the vehicle and what the vehicle is worth in the event your car is totaled in an accident. Look at the sales contract for your car and see how much the dealership has charged you for gap coverage. This figure is normally in the hundreds of dollars. Call your agent for a quote on gap coverage, and you’ll find that it’s only a few dollars a month. And when your car depreciates to a certain point, simply call your agent and ask that the unnecessary coverage be removed.