If you haven't shopped around in a while, here's what you should know!
1. Pay Annually - When you sign up for an auto insurance policy, you most likely will have the option to pay annually, quarterly or monthly. With most insurers, if you pay on any other schedule than "annual", you will be paying an additional fee for that luxury. If at all possible, pay annually!
2. Collision - When choosing your coverage, consider whether or not collision is worth it. Collision insurance is NOT mandated by law as liability insurance is. Collision insurance is what will pay if YOUR car is damaged or needs to be replaced. Hopefully, chances are good that you won't get into an accident. But if you do, you need to ask yourself whether or not you need collision, or if your car just isn't worth repairing or replacing with the cost of the policy itself. In general, people say that if your car is worth $2500 or less, you would be better off putting that policy money into a savings account to accrue interest in order to save for another car. But, you have to make the call.
3. Low Mileage? If you are someone who only drives to the grocery store and back once a week, or if you have someone in your home who does most of the driving for you, let your agent know. Many insurance companies have discounts for drivers who seldom drive. They usually call them "low mileage discounts."
4. Necessity - When deciding on how much coverage you need, make sure you are adequately covered, but don't go overboard. Remember, companies love to sell you anything you will buy. You need to remember
what you can actually AFFORD and what is actually NECESSARY.
5. DD Course - OK, this is something I have pondered for a while and just haven't gotten around to. Yup, the Defensive Driving Course. According to the New York Safety Council, you will get a MANDATORY 10% rate in your auto insurance premium in NY. WHAT? That is huge. I need to do this. Right now, it is only $24.95 for the online course...Hmmm.....
6. Combine - Check to see if your insurance company gives a discount for combined insurance. Many times companies offer auto AND home insurance. The company WANTS to have a bunch of policies out there, that is how they make money. So, they are more inclined to give out discounts for them.
7. Deductible - The deductible is the amount out-of-pocket you will pay once an accident occurs. For instance, if you back into your garage and damage your vehicle, if your deductible is $200, then you will pay that $200 first and the insurance will cover the rest. If you INCREASE your deductible, then your premium will decrease. I would suggest that you increase it to whatever you think you could feasibly pay if an accident were to occur. That will guarantee your lowest premiums. When you have decided on that amount, deposit that amount into an account so that you will have it in case of an accident.
8. Minimal Damage - If you have an "accident" such as backing into a pole, etc. and the damage to your vehicle is minimal, contemplate making a claim before doing so. Each time you file a claim, your insurance company may raise your premium, or even cancel your policy if they think you are an "unsafe" driver. If you can pay out-of-pocket for the damage, I would consider doing so.
9. Multiple Cars - This, to me, is a no-brainer. However, in doing my research, I have found that people in the same household often have different insurance companies for different vehicles. WHAT? OK, know that you will DEFINITELY save money by switching them all to one company. Whew. Scary!
10. Update - If you have an auto policy and something has changed, such as your mileage to/from work has decreased or you have a young driver with a clean record for a few years now, update that information with your agent. You may just end up decreasing your policy. It is worth the extra effort to do this every time you encounter a change if it is going to save you money!
Do you have any other suggestions when shopping for auto insurance? I'd love to know...I'm gonna go make some phone calls!
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