Reduce Auto Insurance Easily
December 5, 2007
Many drivers do not know it, but they might be throwing money away each month they pay their auto insurance premium. According to the National Association of Insurance Commissioners (NAIC), simply shopping for better rates can be one of the most effective ways to save money on auto insurance. NAIC recommends that drivers review their car insurance policies every year. However, only a handful of drivers actually do this.
When you are doing your annual review, keep a few things in mind.
First, you want to consider if your insurance needs have changed since the inception of the current policy. Some of things that you might want to be mindful of include adding another member of the family to policy. Another issue may be the amount of miles that you drive per week. If you changed jobs and now drive less miles that can add up to a savings. You may find that you need to add more coverage but you may also find that you can decrease some coverage.
An example of why you might wish to add to your coverage is under the repair of someone else’s vehicle. Many people have a limit of around $25,000 for that but the truth is most new cars today run that much or more easily. If you were in a multi-car accident, you might find yourself underinsured.
Other issues to look into when you do your review are the added options or riders that you currently have on the policy. The question to ask yourself is if you really need those or can you safely do away with some. For example, do you really need rental reimbursement if you are in an accident and need to rent a car for a short period of time?
You should also look for duplicate coverage. For example, if you belong to AAA or to AARP you may already have emergency roadside protection coverage. If so, you do not need to carry that on your auto insurance too.
Sooner or later you will want to compare rates. One of the very best places to begin this is with your current insurance carrier. Simply ask your agent if you are eligible for any discounts. You may be surprised at how often you can lower your premiums by simply asking.
Many insurance companies will happily provide discounts to customers who decide to purchase multiple policies. If you recently bought a home and are willing to insure it through the same company that covers your car, you may be able to save a lot of money.
Another easy way to save money on auto insurance is to raise the deductibles. For those who have safe driving histories this is perhaps the fastest and easiest way to being down premiums. You will, of course, incur higher out of pocket expenses if you do have an accident, so do keep that in mind.
When you are shopping for insurance make sure that you are comparing policies that are the same. A good way to know what you currently have is to look at the declarations page of the policy. This is usually at the front of the policy and it will summarize the important parts of your coverage. It will tell you the term of the policy (the length of time it is in effect), the policy number (used for reference), and it will also tell you the limits on the various coverage types that you have within the policy.
You may want to take this document with you when go shopping as it makes it very easy to detail the amount and types of coverage that you are looking for. This will help the agent in calculating an accurate rate for the same type of coverage.
It is important to make sure that you do not cancel one policy before another is enacted. Before changing insurance companies, check the end date of your current insurance policy on the declarations page. Most insurance policies end at midnight on the day of expiration. Make sure that your new policy begins at 12:01 a.m. the next day.
Regardless of who insures your vehicles it is always important to keep the company updated on your status. There are several things that most consumers can do that will help lower premiums. These include such things as installing anti-theft devices or attending defensive driver classes.
The list of consumer actions that can result in lower premiums is long, but the insurer cannot reduce your premiums if you do not tell them what you have done. It is always a good idea to notify your insurer as soon as you make a change that might decrease your payments. If you are not sure what these actions are, visit with your agent and ask him or her to detail them to you. You might find that you have already completed some of them