Cutting the Cost of Car Insurance

It's been a rough year financially, so saving a buck whenever you can just makes sense. Car insurance can be costly. Fortunately, there are very clear steps you can take to cut the amount you pay in and keep a bit of money in your pocket.

Saving every buck on your insurance will save you a ton of money in the long-term. Think about it. You are going to pay for car insurance each and every year. If you can save $400 a year, that will total $4,000 in 10 years. What could you do with $4,000? It is not like winning the lotto, but it is nothing to sneeze at either. So, what steps should you take?

The first step is just about the easiest one ever. It is common sense. You need to shop around for many different quotes. Why? Every company is going to evaluate you differently, so you will get vastly different quotes. Insurers set premiums by measuring the risk associated with a person. The use different methodologies to do this, which is why you get quotes that can be a couple hundred dollars off of each other.

The next step is to cancel certain parts of the insurance. If you have health insurance through work, why would you buy coverage of your medical bills with your auto insurance? If your car is worth $5,000, why would you buy $50,000 in collision repair coverage? You are just throwing away money. Understand what you are buying, what you SHOULD be buying and you will save a ton on your premiums.

The third step is to take a look at your deductible. The deductible is the amount you must cover before the insurance kicks in. The higher you raise the deductible, the lower your premiums will go. When you crank the deductible up, you want to also set aside that figure in savings so you can cover any costs that don't qualify. Very important!

A quick word of caution on raising your deductible. If you have a car loan, the lender may require a specific deductible amount. The same goes for the type of insurance coverage you have and the amounts of each. If you don't meet those obligations with your insurance, you could run into a situation where you are in breach of contract with the lender. Getting sued by the lender isn't a good idea in general!

If you complain about the price you pay for car insurance...do something about it. Follow these steps and you'll be on your way to big time insurance savings.