Four Steps to Cheaper Automobile Insurance



First step: Only buy coverage you need. When you buy an automobile insurance policy, you’re really purchasing a package of six different coverages. The state you live in requires you to purchase some of these coverages, and the rest you may or may not need. The state usually requires a certain amount of bodily injury liability insurance, property damage liability insurance and uninsured motorist coverage. Some states require personal injury protection, or no-fault, insurance.

Collision insurance and comprehensive insurance are usually offered in the insurance package, but they’re not required by the state. They cover damage to your car, rather than damage to people and other people’s property. You may not want comprehensive or collision for an old car that’s worth about $2,000.

Step Two: Get the highest deductible you can afford. You could save up to 30% on your premiums if you take a $500 deductible on your collision coverage instead of a $250 deductible. A $1,000 deductible would save even more.

Step Three: Shop around for the best deal. Get price quotes from at least three insurance companies. Prices can vary dramatically from insurer to insurer.

New York did a cost comparison to see how much a 35 year old male driver would pay annually in premiums for the minimum auto insurance required by the state. They checked with 20 insurers and got a price range of $362 to $655.

Step Four: Ask the insurance company what discounts you qualify for. Some discounts available are as follows:

Good driver. Drivers with no accidents or violations on their record can get a discount from most insurers.

Mature drivers. Drivers at least 50 or 55 years old can get discounts of 10% to 20%, depending how much they drive every year.

Carpool drivers. Carpoolers may get a 10% to 20% premium discount.

Multi-car households. Put all the family cars on one policy and you may get a 15% to 20% discount.

Multi-policy discount. If you get your homeowner’s and automobile insurance through the same company, you may get a discount.

Anti-theft device. Install an alarm, an ignition-shutoff system or a wheel-locking device, and you may receive a 5% to 15% discount.

Automatic seat belts and air bags. Some insurers give discounts of up to 30% for cars with automatic seat belts and airbags.

Nonsmoking driver. Don’t smoke? You may receive better rates on liability, no fault and collision insurance. It’s a danger to light a cigarette while driving.

Make sure you ask each insurance company you call for available discounts. Some companies will offer more discounts than others, and many won’t offer any at all unless you ask for them.

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