6 Tricks You Can Use (Today!) To Lower Your Auto Insurance Rate

Cash In Hand

Everyone wants to save money on his/her car insurance of course, but here are 6 easy tricks that you can do TODAY to lower your rate immediately or in the future.

 

~Combine Your Policy With Your Roommate / Significant Other In The Same Household

I know that “going insurance steady” is a terrifying concept if you live with your boyfriend/girlfriend and nobody really knows what the relationship is or where it’s going.  But let me assure you, if you’re already living with the person, splitting all of your physical stuff and finding another place to live is going to be much more of a pain than simply calling your insurance agent and saying you want to have your own policy again.  Earning a multi-car discount can save both people in excess of 15-20% on their monthly rate.

~Bundle Your Home or Add A Renter’s Policy

Everyone’s heard this trick.  “Bundling” is all over the national marketing campaigns now.  But I still see a ton of households not taking advantage of the Auto/Home discount by having their policies with the same company.  This is probably the best discount you can earn – it can be as much as 20%!  If you’re a renter and paying too much for car insurance, adding this policy to protect your property can sometimes be nearly free because of how cheap the renter’s policy is coupled with how significant the added discount is.

~Keep An Eye On Your Credit Report and Score

A huge determiner of your car insurance rate is your credit score and credit report.  Fixing your credit is certainly not an overnight process, but keeping tabs on it and making sure you don’t have silly collections out on you for $25 can really go a long ways in repairing your insurance score.  Paying that $25 outstanding cable bill from two years ago could not only bump your credit but also lower your next car insurance renewal.

~Pay In Full

If you have the extra cash on hand, paying your entire 6 month premium up front can often save you 6-8% over the course of your 6 month term.  It may seem meager, but if you’re trying to trim down that budget without sacrificing coverage, it can equate to $5-10 a month in savings.  This option is also available if you’re in the middle of your term and want to just pay it off.  You are probably saving yourself a couple dollars a month in processing fees by going this route.  There are companies that charge $5 a month just for using a credit/debit card.

~Check For Occupational and College Degree Based Discounts

It’s becoming better advertised that some companies offer discounts for certain professions like policemen and registered nurses, but did you know that by simply having certain college degrees you can qualify for a discount?  Engineering, Biology and Chemistry are all degrees that I’ve seen companies offer discounts for.  It doesn’t cost you anything to ask and it doesn’t always require you to have a job in the field to benefit from the discount.

~Increase Your Liability Limits

This seems a little bit counter intuitive, since raising your liability limits will marginally increase your monthly rates for the short term.  BUT!  If you’re carrying limits that are 50/100 or lower, the insurance companies are already rating you for having such low limits.  Carrying 6 consecutive months of limits that are 100/300 or higher will award you with significantly better rates than if you carry 50/100 or lower.  The difference can be upwards of $200 per term, depending upon the insured.  Think of it as rehabbing your insurance score so the companies see you as a more favorable risk!

 

That’s it!  Which of these sound like something you could take action on today?  Get out there and save some money the smart way.  Oh, and don’t forget the obvious ones:  avoid at-fault accidents and don’t let your policy lapse for any reason!

To better spending!

 

DL

Auto Liability Limits

Auto insurance can be a little complicated. Getting the right coverage means thinking about what you drive, how you drive, how much you drive, how much you want to pay, what you want covered, and even more factors. But it’s easy to just think about cost. Buying car insurance based solely on price is intuitive and not uncommon, but the resulting policy almost always doesn’t provide adequate coverage, and it may cost you more money in the long run.

To understand how important it is to have a good policy, let’s start by looking at the minimum coverage that you need to have. Firstly, you need car insurance in general; driving without car insurance in Minnesota is illegal and can get you cited for a misdemeanor. But let’s assume you’ve got the bare minimum. All owners of cars driven and primarily used in Minnesota need to have no-fault,liability, and uninsured/underinsured motorist insurance.

No-fault insurance, also called personal injury protection (PIP), will pay for your medical bills and loss of income after a car accident, regardless of who caused the accident. This extends to your household family members, and it will also cover you if you’re a passenger in someone else’s car. The minimum state required limit for your PIP is $20,000, which is paid by your insurer and covers your medical bills regardless of fault.

Liability insurance helps pay for injuries and property damage that result from a car accident for which you are found at fault. The minimum requirements for liability coverage are 30/60/10, meaning $30,000 for injuries per person, $60,000 for total injuries per accident, and $10,000 for property damage. After a car accident you were deemed at fault for, the other driver’s PIP will take effect first, and your liability coverage kicks in if the cost exceeds the other driver’s PIP.

Lastly, uninsured/underinsured motorist coverage helps cover costs of an accident with a driver who’s uninsured or has inadequate insurance. If you get into an accident with an uninsured driver, your uninsured motorist coverage will help pay for the costs once you’ve exhausted the limits of your PIP. Your underinsured motorist coverage does the same for an accident with a driver who’s at fault and underinsured; the coverage takes effect once both your PIP and the other driver’s liability insurance limits have been exceeded.

With three different types of insurance and thousands of dollars worth of coverage, this required coverage might seem satisfactory or even unnecessary. But understanding adequate coverage means thinking about the situations on the road that cause it to take effect. This is when we start to see how low liability limits often create insufficient coverage. Let’s say you just got into an accident for which you are at fault, and you and the other driver both have the minimum amount of required coverage. Both your car and the one you hit have a few people in them, and the cars are seriously damaged. If everyone involved has PIP coverage, $20,000 will go towards their injuries. But if anyone is seriously injured, medical bills could cost tens of thousands more than that. Your $60,000 of liability insurance per accident wouldn’t be nearly enough to cover the medical bills for seriously injured passengers, even after everyone’s PIP has kicked in. This scenario assumes that the other driver is nice enough to not sue you, as a lawsuit could cost you hundreds of thousands more (which adequate liability limits would also cover). Also, you’ll have to pay for the damage to your car entirely out of pocket in the event your property damage limit was reached in order to pay for the other vehicles. This kind of catastrophe is certainly unlikely, but disasters like this happen every day. It is for this reason that nearly every state in the U.S. requires auto insurance, and it highlights the importance of getting adequate coverage to give you a financial safety net when things go wrong on the road.

Adding extra coverage to the minimum requirements might seem expensive, but the price of better coverage may surprise you, and there are some ways to lower your premium. The most important thing to remember is that increasing your coverage often affects your premium only slightly. Especially if you’ve got minimum coverage, extending the depth and breadth of your policy is often a no-brainer because it provides important coverage for only a marginally higher premium. Doubling your liability limits, for example, will not double your premium; you’ll get twice the coverage for probably less than ten dollars more per month. This may sound illogical, but a small increase in premiums is a lot of money for a big insurance company.

There are also several ways to lower your premium via discounts. Basic discounts such as a good driving record are usually applied automatically, but some discounts are available only if you look for them and take action. If you take a defensive driving course, for example, you may be eligible for a discount. If your driving habits change, and you’re now driving rarely or only for pleasure, let your insurance company know; they will likely lower your premium. For the insurance company, auto insurance is all about assessing your risk as a driver and combining it with your desired coverage to come up with a price. For you, auto insurance is about being secure and protected from disaster while paying a reasonable price. Nobody wants to get into an accident, and everyone wants to feel safe. This is why the insurance system works, and the only way to take advantage of it is to talk with your agent to find the coverage that’s right for you.

M.E.