How much do you pay for car insurance each year?
Eight hundred dollars a year? Thousand? Two thousand?
Whatever the amount you're paying now, you can reduce that by more than 50% simply by following some simple strategies.
Can you reduce your car insurance costs by investing only 30 seconds of your time? No, this can not be done.
But if you're willing to spend 30 minutes today, this week, or next, I'll show you how to save up to $ 6,000 in your Car Insurance over the next 10 years.
Ok, here we go. Grab your page of car insurance statements (the page in your policy details all the coverages for which you are paying) and track. Be sure to make some notes. If you do not have your policy, or can not find it, call your car insurance company and get one – they will send it to you right away.
STEP 1 – Verify that you are receiving all applicable discounts for the safety features of your vehicles, such as:
– Front, side or head curtain air bags; – Automatic seat belts; – Alarms or Anti-Theft Tracking; – ABS or traction control …. and many more.
Think about the security features you have … and write them down.
STEP 2 – Analyze and change deductibles for comp and collision.
Most car insurance policies have two deductibles – one for "collision" (you hit someone or someone hits you) and another for "comprehensive" (all other damages or losses).
For both, have at least $ 500 deductible – preferably $ 1,000 deductible.
Here's why: If you're paying a $ 100- $ 250.00 franchise, you'll save up to 40% a year on your monthly premiums, moving it to $ 500. That means that if you currently spend $ 1,000 a year on insurance, you will get $ 400 per year. If you jump into a $ 1,000 deductible, you could keep almost $ 600 more per year in your pocket.
I can hear some of you saying, "Wow, a $ 1,000 franchise. That's a lot of money." Yes.
So you're paying $ 1,000 a year with the $ 100 franchise … versus $ 400 a year with a $ 1,000 franchise.
Odds are in your favor – go with the $ 1,000 deductible.
STEP 3 – Review and change liability for property damage.
Have you ever seen a $ 100,000 mailbox? Car insurance companies should have. Here is why ….
Damage to property is not damage to a car, but rather "property" such as a mailbox or utility pole. So why in the world would you need $ 100,000 of cover?
In most cases, almost 100% of all property damage claims can be met with only $ 50,000 of coverage. So, take a look at your policy to find out what you are currently paying. And if you have little or no Equity, lower your coverage even further – to $ 25,000 or the minimum of your states. You can find the least of your states doing a Google search for "state minimum car insurance".
See what to look for in your policy – Many will have their liability coverage listed – 50/100/100 – The first two numbers refer to liability coverage for bodily injury. The first number is the dollar amount covered per person. The second is the dollar figure by accident.
The third number is the "Liability for property damage." That's what you need to change. What does yours say?
STEP 4 – Review and change responsibility for personal injury.
While Bodily Injury Liability Coverage is imperative, most of us end up overpaying for the cover we need. This type of coverage specifically covers:
– Any and all occupants of a car, whether it is yours or someone else's; – Any and all occupants of another vehicle; – And pedestrians
Your only goal with this type of coverage is to have enough protection to protect what is yours …. in other words, your assets. And to protect your assets, you need to find out what your Net Worth is – a well-known site for calculating your net worth – http://www.kiplinger.com/personalfinance/tools/networth.html?
A great way to reduce your premiums is to have no more responsibility for personal injury than your net worth. Here is a common example of coverage that most people have: if your net worth is only $ 20,000 and you have a coverage of $ 100,000, you are throwing money away.
And if you have a small or negative equity, you just need to get the mandatory state minima. You will need this information to get the lowest car insurance rates. Again, you can begin to see your state minima by searching for "car insurance state minima".
See what to look for when trying to find out how much coverage you have now. As I said earlier, most policies today have their liability coverage listed as such – 50/100/100 – The first two numbers (whatever they are) refer to liability coverage for bodily injury. In this example, there is $ 50,000 in coverage per person and $ 100,000 per accident.
What does your policy say? Are you paying more than your equity? If so, change.
STEP 5 – Review and change uninsured / underinsured motorist coverage.
Uninsured / underinsured driver coverage is a fantastic deal for auto insurance companies …. and a lousy one for you. This premium can only increase your car insurance by a few hundred dollars a year.
Most people think that uninsured / underrated coverage is there to fix your car if it is hit by someone without insurance … or someone with bad insurance.
Any damage done to your car is already covered – by the premium you are already paying for the collision.
First things first … check your policy if you are paying for uninsured / underinsured coverage now. If you are, Google "uninsured state driver's requirements" to see if your state requires this.
If not required by your state, cancel it.
If the state in which you live requires uninsured / underestimated coverage, make sure you have the absolute minimum required. These minima are not announced, they change every two years and are very difficult to find. So, here's how you handle it.
Do a Google search for your State Department of Insurance, go to the "Contact Us" page, find a phone number, call and ask about the minims.
Do not try to look for it. Finding the listed minimums is almost impossible on most state websites – they've buried you so deep that you'll never find it. Just call the Insurance Department of your state.
I know it's a bit of work to get the information on its own. However, relying on the Insurance Companies to give you the correct information is not very wise.
Next …. Part 2 of "How to cut your car insurance costs in ten easy steps."