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Car insurance 101: Time to save
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The premium you are quoted for your car insurance is based on many factors, which include your age, sex, zip code, type of car you drive, yearly mileage, driving record, and in some instances, your credit history. There are some factors which are not really in your control, but there are definitely things you can do to make certain you are getting the best possible rate, without unnecessarily exposing yourself to risk (lowering your coverage).
There are the obvious tips, such as shopping around different insurance carriers, inquiring on discounts, and purchasing a qualifying anti-theft device.
One smart move you can make is to increase your deductible.
A deductible is simply the amount of money you will have to pay before the insurance company begins to pay. Simply by increasing your deductible from $250 to $500, you can save 10% or more on your premiums.
Although nobody likes to pay out of pocket expenses because we feel that is why we pay for insurance, it’s always good to see the other side. By reducing the risk to the insurance company, we are rewarded with lower premiums. You are not likely to report minuscule damage to your insurance company anyway, because reporting it could raise your premium. If you aren’t going to report $250 in damage, what is the point in keeping the deductible at $250?
The big caveat with getting a high deductible is that you need to make sure you can comfortably pay it should the need arise.
Do not cut back on your coverage to save money. Remember, saving a few bucks is not worth putting all your assets at risk. If you are a homeowner, the standard minimum recommendation is that you have $100,000 in bodily injury coverage per person, $300,000 in bodily injury coverage per accident, and $50,000 in property damage liability.
