Avoid Filing Small Insurance Claims

You’ll find that if you file a couple of small claims (under $1,000), your insurance company will increase your premiums or possibly cancel your policy. If you save your claims for the costly damages, you’ll keep more money in your wallet.

Knowing When To Drop Your Collision Coverage

You’ll certainly be saving money on auto insurance by dropping collision coverage. In fact, you’ll save bigggg bucks. The question of the day is when should you drop it?

You can start investigating dropping the collision after your car gets to be about 4 to 5 years old. At that point, find out what your car is worth by looking at its value in the Kelly Blue Book (KBB).

The more conservative value will be the trade-in value number. The rule of thumb is you’ll want to drop your collision coverage if the “annual” cost for your collision coverage is 10% or more of the car’s value.

So let’s say your car is valued at $2,000 and you pay $350 a year for collision coverage. That being the case, you would want to drop your collision ($2,000*10% = $200) because your collision premium is above $200; so you’re paying more than 10% of your car’s value.

You see, if you smash up your car and have $4,000 worth of damage, the insurance company is only going to pay $2,000 because that’s what the car’s valued at.

Now, if you still owe money to a lender on the car, they’re not going to let you get away with dropping the collision. But at the 4 to 5 year mark, you shouldn’t have a car payment anyway. Please see used car shopping.

To take it a step further, you can take the extra money you’re saving after you dropped the collision and do some frugal investing with it.

Ask for discounts

You’ll be saving money on auto insurance by asking the insurance agent for available discounts. Potential discounts can include having more than 1 vehicle insured with the same insurance company (Multi-car discount), having a good driving record, no claims against your policy, antilock brakes, antitheft car system and senior citizen discounts.

Also, most insurance companies will give you a discount if you have both your homeowners and auto policies with them.

Many times you can get a premium discount if you have group coverage. For example, we save 25% on premiums by being a member of the MDA (Michigan Dental Association).

You can also get group discounts through business or alumni associations or belonging to a certain credit union.

Shop for rates

Especially on-line, you’ll be saving money on auto insurance by shopping around with many different carriers for a quote. You can also ask your family and friends who they’re insured with and their experiences with their carriers.

Also, by having some quotes in your pocket, you’ll have additional leverage to negotiate your premiums when speaking with other insurance carriers. Let them know you got a better quote elsewhere for the same coverages. They’ll fight for your business.

Check your credit rating

Many insurance carriers will check your credit because they use that in helping to determine how much of a risk you are to them. A poor credit score, in most cases, will lead to the insurance company charging you higher premiums.

Even if you know you have good credit, you should check it at least annually to make sure no mistakes were made on your credit report.

Summary – Saving Money On Auto Insurance

We are confident the saving money on auto insurance tips we’ve shared with you will enable you to keep more money in your wallet instead of giving it away to the insurance company.

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