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Shop around:
Loyalty doesn’t always pay. You
may be paying more than what you need by staying with
the same auto insurance company. A particularly good
time to investigate your alternatives is when your
current policy is about to be up for renewal, especially
if your premium has gone up. You may be surprised to
learn that auto insurance premiums for the exact same
coverage on the same car can vary widely (by hundreds of
dollars) between different insurers, even in states that
regulate auto insurance.
Increase your
deductible:
Your deductible is the amount
you’ll pay out of pocket when making a claim before your
insurance starts picking up the tab. It applies to your
collision and comprehensive coverage (not your
liability) and is the insurance that specifically covers
your car. For many people, increasing your deductible
on your auto insurance is a good way to cut the cost of
the policy. Sometimes your can reduce your premium by
10% or more if your increase your deductible from say,
$250 to $500. Raising it to $1,000 could even save you
40% or more.
Watch your credit
report:
Your credit report can affect
whether a company is willing to insure you, as well as
the rate. Paying your bills on time and maintaining a
good credit history will allow you to enjoy lower auto
insurance rates. For example someone with an extremely
poor history could pay up to 30%-40% more than people
without problems.
Get the right car:
Cars are rated on a risk scale for
auto insurance purposes. In general, high performance,
flashy vehicles are classified as higher risks because
they are common targets for thieves and vandals. Also,
statistically, the people who own them tend to drive
more recklessly. Therefore, people who own them will
pay a higher premium. If you are debating between two
models, it may be worthwhile to give your insurance
agent a call to see if there is a notable difference in
the insurance costs. Sometimes, cars of relative price
do not correlate with insurance costs.
Drop collision and/or
comprehensive coverages on older cars:
If you own a car worth less than
$2,000 you’ll probably pay more for the coverage than
you’ll ever collect on a claim. Although insurance
companies use their own criteria to determine fair
market value for vehicles, you can find out how much
your car is generally worth by using the Kelly Blue
Book. A general rule of thumb is that the older/higher
mileage your car is, the more you should look into
reducing your coverage.
Keep your car in a
garage:
Cars parked in garages are less
likely to be stolen, vandalized, or struck by other
vehicles. Storing your car in a garage may entitle you
to a reduction of your premium.
Be aware of the
insurance gap:
Having gaps in your insurance can
be very costly. Obviously, if you get into an accident
during a gap you will not be covered. However, when you
have a lapse in coverage, most insurance companies will
increase your rate. Gaps in coverage have been
correlated to a higher risk of accidents, (one factor
determining your rate.)
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