Monday, January 18, 2010

Tips on How to Save on Auto Insurance

1. Shop around. In most states, insurance companies’ rates vary widely. Different companies may have better rates for different vehicles or different zip codes. One company may have great rates one year and then raise them the next, so it pays to shop around periodically. Get as many quotes as you can, and get them in writing if possible. Be honest with each agent so that he or she can give you an accurate rate, and have each company quote you for exactly the same coverage—if you’re not getting “apples-to-apples" Quotes, you can’t tell which company is really cheaper. Also look into doing the following:
o Insure all your cars with one company. You can save big with “multi-car" insurance discounts, so you should generally insure all your cars in one place if at all possible.
o Insure your home where you insure your cars. Many companies offer discounts if you have both your home insurance and auto insurance with them. The discount may apply to one policy or to both. Even if you can find a better price with another company for one of your policies, your total insurance cost may be lower if you have both policies with the same company. Sometimes you can also get discounts for insuring boats.
o Get insurance quotes for vehicles before you buy them. If you’re in the market for a new car, but you can’t decide between a few different models, call your agent and find out how much it will cost to insure each one. Insurance companies calculate vehicle-specific rates based on how much the vehicle costs and how often a particular model is involved in accidents or is stolen, among other things, so the premium difference for similar cars may be substantial.
2. Stay insured. Never let your insurance policy lapse. You may find it difficult to obtain insurance if your policy expires, and your insurance may be more expensive than it was before. Customers who let their insurance expire—even for a couple days—are statistically higher-risk, and insurance companies often charge extra for this.
3. Increase your deductibles. Some coverage’s, notably comprehensive and collision, have deductibles, an amount you pay out of pocket before the insurance company begins to pay. The higher your deductible, the lower the price for that coverage. Have your agent quote you higher deductibles to see how much you could save. Make sure that you can afford to pay your deductible before raising it—a $1,000 deductible, for example, may be substantially cheaper than a $250 deductible, but you’ll have to pay $750 more in the event of an accident.
4. Buy only the coverage you need. Review your coverage with your agent at least once a year. Depending on your assets and personal preferences, you may not need as much liability coverage as you currently have, or you may wish to reject certain coverage’s such as uninsured motorist or personal injury protection. Make sure you fully understand the implications of dropping or reducing coverage—in many cases, the extra risk you take on by doing so exceeds the money you save. For example, if your car isn’t worth much, you may be better off dropping the coverage that protect against damage or theft. You may also be able to

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