How to Save on Car Insurance

Everyone who owns a car needs auto insurance. This article will give you some tips on lowering your auto insurance costs. You will find a checklist of items to ask your insurance agent that may qualify for discounts. Keep in mind that not all discounts can be applied with all insurance companies in all states.

1. Shop Around
Go to your favorite search engine and type in “free car insurance quotes online”. You’ll see a long list of insurance companies that you may even be familiar with. Visit at least five car insurance websites and look for a link to free quotes. You will then be asked basic information about yourself, your driving history, and your car’s make, model, and year. It just takes a couple of minutes, and shortly thereafter, they will email you a no obligation quote. Write down their website address, their toll free number, and customer service email address.

Each insurance company will ask you generally the same questions, and will give you options about how much coverage you will want. Find your current policy, if you have one, and take note of the coverage you currently have. Always provide the same information and ask for the same coverage at each company so you will be comparing apples to apples. Read the fine print and make sure nothing is excluded from the quote like Rental car coverage, towing, medical, etc…

For the purposes of the quote, the insurance company will not ask you your social security number, but keep in mind your actual cost maybe higher or lower depending on your credit history. If you’re not sure about some of the terminology or coverage, take notes so that you can ask the insurance company about them directly.

Once you have at least five quotes emailed to you, take the lowest two or three quotes and see if they are less than what you are paying now. Most likely at least one of them is much lower. At this point you will want to call them directly to get the most accurate quote by providing additional personal information. For additional discounts, here is a checklist of things you should ask about.

[ ] $500 deductible
[ ] $1,000 deductible
[ ] Paying monthly, semi-annually, or annually
[ ] More than 1 car
[ ] No Accidents in 3 Years
[ ] No Moving Violations in 3 Years
[ ] Driver Training Courses
[ ] Defensive Driving Courses
[ ] Anti-Theft Devices
[ ] Low Annual Mileage
[ ] Air Bags
[ ] Anti-Lock Brakes
[ ] Daytime Running Lights
[ ] Student Drivers with Good Grades
[ ] Auto and Homeowners Coverage with the Same Company
[ ] College Students away from Home
[ ] Long-Time Customer
[ ] Other Discounts

2. Saving Insurance Premium on cars you own outright.
If you own a clear title to your car, meaning there is no bank loan on it, then you may want to consider dropping the collision/comprehensive coverage. As a rule of thumb, if the cars value is less than $3000, it may not make sense for you to pay for this additional coverage. Over time, the cost of the additional insurance premium will exceed the value of the car. It’s pretty simple math.

Check the fair market value of your car either through Edmunds.com or even your local newspaper. See what other people are trying to get for the same car. Keep in mind your cars mileage, condition, and age. Has it been in an accident before? Does it have unusually high mileage in excess of 15,000 miles per year? Does it need new tires? You get the idea. Be realistic, because in the event that this car is in an accident and is damaged beyond repair, it is unlikely you will get the full value of the car.

3. Ask About Insurance Rates in Different Areas
Rates can vary widely even in the same state. Different locals have different accident rates, population, and crime. These all factor in to the final cost. If you are moving to a different area, ask about what the rates are for that town.

4. Ask About Getting Other Insurance Policies Together With Your Auto Insurance
Combining insurance policies with the same company can often give you additional discounts. If you own a home, ask about combining your homeowners insurance with your auto insurance. Also ask about other polices, such as life, health, and business insurance. Most insurance companies cover a wide range of policies and will give substantial discounts when you do business exclusively with them.

5. A Clean Credit History Can Reduce Car Premiums:
Having good credit can also lower your insurance costs. Many insurance companies will use credit information to price auto insurance policies. Drivers with good credit and a clean driving record may qualify as a “preferred” customer with lower risk and will be rewarded with lower premiums.

6. Low Mileage Discounts
Some companies offer discounts to drivers who drive a lower than average number of miles per year. If you car pool, take public transportation like the subway, or work from home, you will most likely drive few miles per year than the average driver.

7. Group Insurance
Some insurers offer discounts to drivers who work for certain companies or belong to professional associations, and alumni groups. Ask your employer, group or clubs that you belong to if they have any special arrangements with different insurance companies.

Using all of these tips can save you hundreds of dollars per year, especially when you have multiple cars and multiple drivers in the same household.

How Much Car Insurance Should You Buy?

How much insurance should you buy? Any insurance agent worthy of their salt will tell you that you should buy as much as you can afford. While this is a good rule of thumb, it’s about as useful as a stock broker’s tip to buy low and sell high. It might be sound logic but it doesn’t get you any closer to an educated decision. There are a few filters that need consideration in order to make that educated decision. First, what is the state required minimum coverage where you live? Second, what does the minimum cover? Third, what other coverage is available and can you afford it? And fourthly, what are you protecting?

What do the minimums cover?
Now that you know what your state requires, what are you actually covered for once you purchase the minimum? Using the coverage definitions that follow, find the types of coverage required and see what your state says is the accepted minimum.

Coverage Definitions

Bodily Injury Liability
Covers other people’s bodily injuries or death for which you are responsible. It also provides for a legal defense if another party in the accident files a lawsuit against you. Claims for bodily injury may be for such things as medical bills, loss of income or pain and suffering. In the event of a serious accident, you want enough insurance to cover a judgment against you in a lawsuit, without jeopardizing your personal assets. Bodily injury liability covers injury to people, not your vehicle. Therefore, it’s a good idea to have the same level of coverage for all of your cars. Bodily Injury Liability does NOT cover you or other people on your policy. Coverage is limited to the terms and conditions contained in the policy.

Comprehensive Physical Damage Coverage
Covers your vehicle, and sometimes other vehicles you may be driving for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire, or animals. Pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as high a deductible as you feel comfortable paying out of pocket. Coverage is limited to the terms and conditions contained in the policy.

Collision Coverage
Covers damage to your car when your car hits, or is hit by, another vehicle, or other object. Pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as large a deductible as you feel comfortable paying out of pocket. For older cars, consider dropping this coverage, since coverage is normally limited to the cash value of your car. Coverage is limited to the terms and conditions contained in the policy.

Medical Payments
Covers medical expenses to you and your passengers injured in an accident. There may also be coverage if as a pedestrian a vehicle injures you. Does NOT matter who is at fault. Coverage is limited to the terms and conditions contained in the policy.

Uninsured Motorist Coverage
Covers bodily injuries to you and your passengers when the other person has no insurance or not enough insurance in a crash that is not your fault. In some states, there is also uninsured motorist coverage for damage to your vehicle. Given the large number of uninsured motorists, this is very important coverage to have, even in states with no-fault insurance. Coverage is limited to the terms and conditions contained in the policy

Personal Injury Protection Coverage
Covers within the specified limits, the medical, hospital and funeral expenses of the insured, others in his vehicles and pedestrians struck by him. The basic coverage for the insured’s own injuries on a first-party basis, without regard to fault. It is only available in certain states.

Property Damage Liability
Covers you if your car damages someone else’s property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It also provides you with legal defense if another party files a lawsuit against you. It is a good idea to purchase enough of this insurance to cover the amount of damage your car might do to another vehicle or object. Coverage is limited to the terms and conditions contained in the policy.

Rental Car Reimbursement
Covers renting a car if your car isn’t drivable or while your car is being repaired because of a covered accident.

What else is available and can you afford it?
Did you come across a coverage and think, “I need that but it isn’t required by state law” when you were reviewing the coverage definitions? Chances are you did. Can your budget afford the additional expense of these protections? Or maybe more to the point; can you afford NOT to have these additional protections? At CarInsurance.com it’s easy to get multiple quotes all with a click of your mouse. And during the quoting process, it’s simple to add or remove coverage to see how additional coverage will affect your budget.

What are you protecting?
What assets need to be protected from being plucked away if you cause injury or damage?
A) Your car itself. If this is a significant asset, or at least the bank you owe money to thinks so, then you will need comprehensive and collision.
B) Your net worth. Do you have an enormous net worth to protect. If so, either get it out of your name and into a trust or buy all the insurance you can. If you have little or nothing to protect, then you can get by with less and still be financially responsible.

However, after you determine how much protection to get, always ask how much more it is for the next level higher. Very often, you can get significantly more coverage for very little cost.

Car insurance isn’t flashy. There is no “wow” factor and the opposite gender isn’t going to be impressed by the size of your policy. But not having enough can be the difference between financial stability and financial ruin. For what its worth, CarInsurance.com finds financial stability incredibly appealing.