Selecting your car insurance can be a confusing process if you haven’t ever bought car insurance before. It helps to be educated about what questions to ask and things you don’t need added to the policy. Remember that insurance companies prey on our worst fears and what “could” happen.
Most people buy too much car insurance for lack of knowledge or based on fear. Insurance is guaranteed lost money unless tragedy strikes your life. Car insurance is bought to protect you from serious financial losses. It will be one of your largest expenses over your lifetime. That’s why it’s important to be educated about ways to save. You can save 25% or more if you know how.
First thing to do is always look around for better prices. Compare each company as rates will vary greatly from one company to the next. Companies that seem to have the lowest rates are State Farm, Geico, and Liberty Mutual. It is still advisable to check with as many companies as possible.
The only time you need property damage liability is when the accident you have is your fault. If you drive safely then it’s not likely you will ever use this coverage. You’ll want to find out if you need to carry it and how much. So calculate your net worth and multiply that by two. This is the amount of coverage you will want to carry. If your net worth is over $50,000 you only need to carry a maximum of $50,000 in coverage.
Write the VIN number down off your car before you make the purchase. You’ll want to get an estimate of the cost of insurance compared to another car. This could be a deciding factor in whether or not you purchase this particular car. Rates will vary from car to car and the safer cars get lower rates.
Never file a claim on small damages. If your damages are $600 or less it could save you money to pay these damages out of pocket. Your insurance company will increase the rates in the following year as much as 30% if you file two or more claims in the previous year. Check the numbers before you file and see if it’s worth making the claim.
The easiest way to save money is to raise your deductibles. A deductible is what you pay out of pocket when there is a claim. You can save around three or four hundred dollars a year just by asking your agent to raise your deductible.
Your teenager can be expensive to insure until they turn 25. Don’t put the title in their name on the car they drive, keep it in yours. Just have your child added to your policy and this can decrease the cost of your insurance. If your child is in college and will not drive as frequently let your agent know they will lower your rates.
Once your car value drops below $2000 you don’t need to pay for comprehensive or collision insurance. The insurance company won’t give you more than what your car is worth. Towing and car rental insurance is not necessary and a waste of your money.
No one should have to tell you how foolish it is to drink and drive but if you do, it can cost you dearly. It’s a dangerous practice and they will fine you heavily. If you do happen to kill or injure someone judges will be harsh. You’ll probably end up paying more than what your liability insurance will cover. Some insurances won’t even cover drunk drivers.
Ask for all of your basic discounts such as anti-lock brakes, good driver discount, multiple policies, student with good grades, seat belts and multiple cars. These discounts alone can save you as much as 30%.
If you have medical insurance you don’t need medical on your auto and you can ask for coordinated benefits. Don’t let an agent sell you something you just don’t need.