Taking the time to understand a few things about auto insurance will pay off in reduced insurance costs in the future
SPEND WISELY
Most people will spend money to get a $500 deductible instead of a $1000 deductible but ignore the fact that a liability judgment of $500,000 could mean financial ruin forever. Increasing the deductible to $1000 and spending the different to increase your liability coverage makes a lot of financial sense. Increasing liability coverage from $300,000 which is the standard amount to $500,000 will cost approximately $60 annually for two vehicles on the policy.
The trade off is the amount saved on premiums balanced against the amount of risk you can handle. Savings on premiums can be made by reducing the amount of personal injury protection. This is makes sense particularly if you are covered under health insurance which pays medical bills for accidents. It makes no sense to pay twice for the same coverage.
LIABILITY COVERAGE PER PERSON
Write the policy so that the coverage in liability per person per accident and the total per accident are the same figure. A standard policy with $300,000 in total liability often pays a maximum of $100,000 per person.
This means that if you are sued for $200,000 and have a judgment against you, you will be responsible for $100,000 in liability damages. Instead, write the policy so that $300,000 coverage actually reflects $300,000 worth of coverage.
UMBRELLA POLICY
This is a good idea if you have considerable assets. It covers both your autos and home for liability claims. The coverage is up to $1 million and costs around $200 to $300 annually.
DISCOUNTS
You can save a lot of money by taking advantage of discounts. Things like accident free driving, low mileage, storing an auto in a garage, safety features, anti-theft devises and loyalty discounts are all ways to reduce premium amounts. If you have multiple cars or more than one policy with an insurance company, you should be eligible for a discount also. Just making an annual payment instead of a monthly payment can save $100 per year. If you take driving education courses, or if your teen driver maintains good grades, it will reduct the premium on your auto policy.
TEEN DRIVERS
Teen drivers are probably the biggest single hit your car insurance rates can take. If they are away at college, and not driving your car, you should remove them from your insurance policy. Certainly a teen who is mature enough to drive can find a way to earn money to help pay for their own auto insurance.
OLDER CARS
Don't pay for collision insurance on an older car, because you'll be paying more in premiums than the car is worth. Find out the amount of your premium you are paying for collision and set it aside in a fund. You'll probably find out the amount you save in collision insurance will more than pay for replacing the older car.
Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration . He is working as writer and financial consultant to find a Personal loans, Debt consolidation, home equity loans at cheap rates visit www.taperman.com