How to Reduce Auto Insurance Rates and Save
Save Money by Revising Car Insurance Deductibles and Coverages
Mar 23, 2009
Most drivers don’t have the time to review their auto insurance policy and try to decipher all the confusing technical auto insurance terminology. However, neglecting to learn the ins and outs of auto insurance may cost drivers extra money on their auto insurance that could otherwise be saved.
When it comes to auto insurance, the driver has numerous ways to save money. All it takes is a quick call to the auto insurance company or a click of the mouse to start saving money on auto insurance today.
Reducing Auto Insurance: Revising Coverages
One of the most effective ways to reduce auto insurance rates is to review the auto insurance policy and make changes to coverages. Some scenarios include
- eliminating towing and rental reimbursement if a new car is under an extended warranty that already covers these areas
- declining collision coverage for a car older than 10 years
- eliminating medical coverage if driver is already covered by health insurance
- eliminating personal injury protection (PIP) if car is driven mainly for short errands
- reducing auto insurance rates for specific coverages, for example changing property damage liability from $100K to $50K if the car is driven mainly on side roads for short errands
Most states require liability coverage at minimum, which covers the driver’s legal responsibility to pay for medical expenses and damage done to other vehicles when at fault in a car accident. While liability cannot be eliminated, it can be reduced which could lead to savings on auto insurance.
Reducing Auto Insurance: Raising Deductibles
Another effective way to reduce auto insurance rates is to raise deductible amounts on various types of coverage. Some scenarios include
- raising deductible on comprehensive coverage, for example if windshield chipping and cracking and/or natural disasters are not a problem in the driver’s local area
- raising deductible on collision coverage, for example from $50 to $500
- raising the deductible for uninsured/underinsured motorist bodily injury coverage
The key to reducing deductibles is to set them at a midpoint where they are not unaffordably high in the case the driver must use the auto insurance coverage, yet not too low as to cause higher auto insurance rates.
Reducing Auto Insurance: Additional Steps
Aside from changing coverages and deductibles, drivers can take other steps to reduce auto insurance rates. This includes safe driving with a clean accident history, driving fewer miles on the highway, and receiving auto insurance discounts for multiple vehicles on the same policy.
Drivers can also receive auto insurance discounts for the type of car they choose to drive. For example, cars with safety features such as daytime running lights, side curtain airbags, and/or anti-lock brakes may receive a discount on auto insurance.
Auto insurance companies may also factor in accident history and theft loss statistics of the driver’s car when calculating auto insurance rates. Drivers can check the Insurance Institute for Highway Safety to view insurance loss statistics for specific vehicles.
For many drivers, auto insurance can be somewhat intimidating and confusing. But taking the time to study and revise such areas as coverages and deductibles in addition to choosing a safe car and changing driving habits can save drivers significant amounts of money on their auto insurance rates.
See related articles, "Understanding Auto Insurance Terminology," “How to Find the Best Deal on Auto Insurance," and "The Basics of Auto Insurance."
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