When You Need to Lower Your Car Insurance Costs

When looking to the new year for ways to cut costs in your everyday life, look no further than your own auto insurance policy. Are you really paying for what you need or what is recommended? You know your driving habits better than anyone else and should be able to determine what’s appropriate for your wallet. Here are some helpful tips for reducing costs:

1. Consider Higher Deductibles

The deductible is the amount of money you have to dish out before your insurance policy takes over. By increasing your deductible to $500 from $200, you could lower the cost of your collision and comprehensive coverage by 15% to 30%. Increasing it to $1,000 could decrease that cost by at least 40%.

2. Avoid Duplicate Medical Coverage

Most insurance policies have an option for personal injury protection and medical coverage. But if you have an existing health plan, you may be paying extra for double coverage. Purchase only the minimum which is required by your state. One word of advice, however: check with your health and medical plan to make sure the policy will cover injuries sustained in auto accidents.

3. Bundle Your Coverage

Many companies offer discounts for multiple policies. Ask your insurance carrier if there’s a price difference if you combine your auto, homeowners, and/or life insurance policies. If there are no discounts, consider shopping around.

4. Ask About Other Discounts

You shouldn’t be shy when it comes to asking questions about auto insurance. Many companies offer reduced rates for people over 50 or 55 years of age, if you have a clean driving record, or if you have been a longtime customer. There may also be discounts for customers who complete a defensive driving course refresher (many states offer it online); teens who have completed a driving course through an approved driver’s education program; teens who are included on your policy; or students who attend college and do not take their car with them.

5. Skip Unnecessary Coverage

Before you agree to expensive collision and/or comprehensive coverage, ask yourself a few questions first: How old is your vehicle? What is the vehicle’s market worth? Sometimes this coverage isn’t worth it because a claim may not exceed the amount of the insurance policy or deductible. Likewise, you might want to drop emergency road assistance coverage through your insurance company if you have an adequate plan with another program such as AAA or through your credit card.