22 Easy Ways to Save Money on Auto Insurance
Saving Money by Tweaking Car Insurance Limits and Deductibles
Mar 28, 2009
In today’s hurried world, many people gloss over their auto insurance policy without taking the time to fully understand what they’re paying for. With all the coverages, deductibles, and payment limits, it can quickly become confusing and time-consuming to try to figure it all out.
However, drivers who neglect to understand the coverages on their auto insurance and discover exactly what they are paying for may be vastly overspending on their monthly auto insurance premiums.
All it takes is a brief call to the auto insurance company or pointing the web browser to the driver’s auto insurance website to start saving money on auto insurance immediately.
Auto Insurance Money-Saving Ideas: Buying a New Car
Auto insurance companies generally provide certain discounts on the auto insurance policy for safety features in a new or used car. When shopping for a car, consider the following:
- new cars less than 3 years old may receive a discount
- buy a car with low theft loss statistics
- buy a car with safety features such as airbags, anti-theft measures, or anti-lock brakes
- cover the new car under the same auto insurance policy (auto insurance loyalty discount)
Auto Insurance Money-Saving Ideas: Making Changes to Auto Insurance Policy
Changes to the driver’s auto insurance policy basically entails tweaking deductibles and lowering payment limits:
- raise deductible on comprehensive coverage if the driver lives in an area with less crime, fewer natural disasters, fewer animal run-ins, or less likelihood for windshield chipping
- reduce payment limits on personal injury protection (PIP) coverage if car is used only occasionally and for short errands on side streets, and driver is covered under personal health insurance
- reduce payment limits on liability coverage (e.g., lower property damage liability from $100,000 to $50,000)
- eliminate rental reimbursement and towing coverage if the driver is already covered for roadside assistance with a new car extended warranty
- eliminate medical payments coverage if already covered under personal health insurance and personal injury protection (and don’t live in one of the states that mandate PIP)
- eliminate or reduce payment limits on rental reimbursement
- decline collision coverage for a car older than 10 years
- decline towing and labor coverage
- raise deductible on collision coverage (e.g., $500 to $1000)
- lower payment limits for uninsured/underinsured motorist bodily injury coverage
Auto Insurance Money-Saving Ideas: Smart Driver Behavior
After reviewing the auto insurance policy, the driver should consider the following smart driving tips to reduce his or her auto insurance and receive discounts:
- be a defensive, proactive driver
- obey the rules of the road and don't take unnecessary risks
- avoid distractions such as in-car use of a mobile phone
- drive safely to avoid having an accident history with auto insurance
- drive fewer miles (low mileage discount)
- maintain a good payment history
- place multiple vehicles on the same policy (multiple car discount)
- take a defensive driving course (certain states only)
Auto Insurance Money-Saving Ideas: The Bottom Line
For many drivers, auto insurance can be confusing and time-consuming to decipher. But taking the time to tweak such areas as coverages and deductibles in addition to changing driving habits and choosing a safe car can save drivers a significant amount of money on their auto insurance premiums.
See related articles, “How to Find the Best Deal on Auto Insurance," "The Basics of Auto Insurance," and "Understanding Auto Insurance Terminology."
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