Tag Archives: insurance

Four Minutes Will Save You $400 On Auto Insurance

It is possible with a little effort to slash the amount that you are paying for auto insurance by 50% by grasping a few simple ideas and facts about how auto insurance works and how the premiums are calculated. Once you grasp how it all works, you could save significant amounts on your premium not only this year but also every year.

The first thing you need is your auto insurance declarations page, if you don’t know what that is. Its one of the pages of your current policy, that sets out the details of your coverage.

You need to read through the details and be sure to make brief, but detailed notes of certain aspects of exactly what you are being covered for at the moment. You will first need to check that you are receiving all the discounts that you are liable for.

Auto insurance discounts can be given to you, for vehicle safety features that you car has fitted. These include air bags, make a note of what kind you have front, side, head and so on. Anti theft, systems can also attract a discount, especially electronic tracking devices.

Simple items like automatic seat belts can also give you a small discount. Don’t forget other safety items such as Traction control or ABS and any other features that your vehicle may be fitted with. Note down these, any other safety, and security devices fitted to the vehicle.

Next, go to the details of any deductibles that are included in the policy, all standard policies should carry a minimum of a $500 deductible. The reason for this is simple, if your policy has a $200 deductible, altering to $500 can save you 30-40% on your premium, on average that will save you $450.
Moving you’re deductable up to $1000 will then save you $650 per year on your premium. So simple math says if you don’t have an accident for two years you will have saved $1300. If you should have an accident after 15 months, you will have still paid your premium twice, even after paying the $1000 you are still $300 in pocket. It’s a gamble to up your deductable, but the odds are stacked well in your favor.

Now move on to the property damage clause, let’s say that you are insured for $150,000. This covers you for damage to ‘property’ such as a house, a wall, a mailbox. So let us assume you hit a house, not common, but it can happen. How much damage would you have to inflict to need $150,000 worth of repairs? If you hit a wall how much could that cost, $5000? $10,000?

The truth is that this kind of risk is not very liable to amount to a huge bill; in reality, $50,000 should cover nearly all ‘property damage ‘possibilities.

Another thing to consider is if you have little or no net worth then your risk is minimal anyway, so maybe you should reduce the cover even further, down to your states minimum level.

Bodily injury liability will be next on your list; it covers all drivers and passengers of your vehicle and any other vehicle that you may collide with as well as all pedestrians.

The best way to calculate how much bodily injury cover you should have is to calculate your net worth; your insurance should be equal to that figure. You may currently be covered for $150,000, your net worth, what you are worth if you sold everything you own, may only be $30,000. So why would you need bodily injury that is several times what you are worth on paper?

The last thing for you to review is your uninsured or under-insured motorist cover, this cover increases your premium by around $200. The perception is that you will be covered if you are involved in an accident with a motorist who has little or no insurance.

This is incorrect if you have a comprehensive policy you are already covered, you don’t need this additional, double coverage. If your state doesn’t require that type of insurance, cancel it, if it does then reduce it to the minimum.

That is how four minutes can save you hundreds of dollars one your auto insurance premiums. There are other ways to make savings if you contact an online agent he will be able to show you other simple ways to save lots of money on your auto insurance premium.

Multi-Car Insurance Cheers

Recently I came across an article that discussed the figures behind accidents and households that own multiple cars. According to the study a household with more than one car are 22% less likely to be in an accident. But why would multiple vehicles pose as a reducer in accidents? It’s hard to find cheap car insurance, so maybe having multiple cars will help with rising rates.

The study claims that multi-car households own more expensive vehicles, therefore are more cautious when they are driving. I’m not sure how much I personally believe this is the case, because I’ve been almost hit by a number of Lexus drivers who refuse to get off their cell phones. 😉 At any rate, it’s normal when buying online car insurance for multiple vehicles to get a discount. My problem is that I have too many vehicles, so I get a fleet discount.

What’s also interesting about the study, is that it discusses automobile enthusiasts and their impact on safer driving. This I can get my brain around as being believable, after all, if I care about the car I’m driving, I’m gonna be more careful. Nicer vehicles does not always translate into caring MORE. What’s so confusing about insurance, is that it varies so much from company to company and this study is bias, mainly because it was put out by the Admiral. I’d recommend getting car insurance quotes from multiple online sources, for your multiple vehicles. 😉