5 Ways to Minimize Your Car Insurance Costs


Automobile insurance. We spend thousands of dollars on it then hope we’ll never need it. By law and common sense we know that we must have it. But that doesn’t mean we should pay one dollar more for auto insurance than necessary.

SHOP AROUND. Rates between insurance companies can vary greatly. Call three different companies today and you’re bound to get three different quotes. There is nothing righteous about staying with the same company forever. An hour of your time once a year could net a handsome premium reduction. You can get quotes online from companies that sell directly, like Geico, State Farm and  21st Century. Compare with what you have and don’t be afraid to make a switch.


INCREASE DEDUCTIBLES. Remember this: The lower the deductible the higher the premium. You’re not likely to file a claim for a minor incident because that could make your premiums skyrocket. So if you’re not going to file small claims, think about increasing your deductibles to say $500 even $1,000. Then put the premium savings in a special account to pay for the fender-benders. One Florida couple that raised the deductible for their 2005 Volvo and 2003 Acura Legend from $500 to $1,000 cut their annual premium from $3,200 to $2,800–a decrease of 12 percent. That is significant. But they need to squirrel away those savings. If the worst happens they don’t want to feel compelled to use a credit card to cover the deductible.

DRIVE A SAFER CAR. Larger and heavier cars tend to be safer and therefore less expensive to insure. And don’t drive a thief’s favorite model. (The Ford F-250 pickup is the new favorite vehicle target of thieves, by the way). You can discover which cars are more likely to be totaled or stolen by calling the Highway Loss Data Institute, 703 247-1600, or search online at www.iihs.org

DROP UNNECESSARY COVERAGE. Examine your policy carefully for coverage you can reasonably reduce or eliminate. The most promising area may be your collision and comprehensive coverage. The general rule is to drop collision coverage when its annual premium exceeds 10 percent of the car’s market value. Most public libraries have the National Automobile Dealers Association price book of market values. Or visit Edmund’s Automotive Buyer’s Guide, or Kelley Blue Books, to discover values online.

RACK UP DISCOUNTS. Mark Green, author of The Consumer Bible, estimates Americans are paying $300 million more in auto insurance premiums than necessary per year, simply because they are not getting credits for which they qualify. For example, if you insure all your cars, also your home with the same company, you will likely qualify for a significant discount. Safety equipment like anti-lock brakes, advanced air bags, daytime running lights, rearview cameras and security systems will reduce your exposure and your premium. Non-smokers, good students and safe drivers also qualify for discounts. Cindy M. walked away from a phone call to her company with a nice reduction of $204 all because she asked them to run down the list of discounts to see if she qualified.

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3 replies
  1. Justgivingtwocents
    Justgivingtwocents says:

    Helly Mary,
    I enjoy reading your articles, and I trust and believe what you say to be true. I think your wisdom is vast and that you truly care to help people save money.
    This particular article hit home with me because I do work in the insurance business and have for a long time. Most everything you mentioned holds truth and I agree, however there is one point that I might be careful about. When you say shop around, I agree people want to get the best price with the best benefits. Obviously. However when a person switches insurance companies too many times, it can affect the way that companies will look at them in the future, thus actually causing their premiums to be slightly higher, the more and more that they switch.
    Think about it like this:
    Why would an insurance company want to cover someone and give them the best rate, if they know that the person they are looking to insure is going to leave them soon, since they will continually be shopping around? A lot of these companies will actually offer MORE DISCOUNTS the longer that they stay with the company. Which in my opinion is a better route to go. So check with your company to see if they offer long time discounts.
    I just thought I would share a little piece of what I knew. I hope this helps everyone out there and good luck to all!
    Thank you again Mary!


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