How much do you pay each year for car insurance?
A thousand dollars a month? Ten hundred? The number 2,000?
No matter how much you're paying now, if you follow a few simple steps, you can cut that amount by more than half.
Can spending 30 seconds of your time save you money on car insurance? No, you can't do that.
But if you're willing to spend 30 minutes with me today, this week, or next, I'll show you how to save up to $6,000 on your car insurance over the next 10 years.
Okay, here we go. Grab the page in your car insurance policy that lists all the coverages you're paying for, and follow along. Make sure to write something down. If you can't find your policy or don't have it with you, call your car insurance company and ask for a copy. They'll send it to you right away.
Strategy 1: Make sure you get all discounts for safety features on your car, such as:
- Air bags in the front, sides, or head curtain;
- Seat Belts that buckle themselves;
- Alarms or tracking to prevent theft;
- ABS or Traction Control...and a lot more.
Think about the things you have that make you safe, and write them down.
Strategy 2: Check and change your collision and comprehensive deductibles.
Most car insurance policies have two deductibles: one for "collision" (when you hit someone or they hit you) and one for "Comprehensive" (when you hit someone or they hit you) (all other damage or loss).
Have at least a $500 deductible for each of these, and a $1,000 deductible is better.
Here's why: If your deductible is currently between $100 and $250, moving it to $500 will save you up to 40% per year on your monthly premiums. That means that if you pay $1,000 a year for insurance now, you'll get to keep $400 a year. If you raise your deductible to $1,000, you could keep almost $600 more in your pocket each year.
Some of you are probably saying, "Wow, that's a lot of money. The amount is a lot." Certainly.
Also, paying $1,000 a year with a $100 deductible is more expensive than paying $400 a year with a $1,000 deductible.
You have a good chance of winning, so choose the $1,000 deductible.
Strategy 3: Review and change who is responsible for damage to property.
Have you ever seen a mailbox that costs $100,000? Car Insurance Companies must have. This is why...
Damage to property, like a mailbox or a utility pole, is different from damage to a car. So, why on earth would you need coverage worth $100,000?
Most of the time, only $50,000 of coverage is enough to take care of almost all property damage claims. So look at your policy to see what you're paying for right now. And if you don't have much money or none at all, drop your coverage even more, to $25,000 or the minimum for your state. Do a Google search for "car insurance state minimums" to find out what the minimums are in your state.
Here are some things to look for in your policy: Many of them will list your liability insurance like this: - 50/100/100 - The first two numbers are about coverage for injuries to people. The first number shows how much money is covered for each person. The second is the amount of money each accident costs.
"Property Damage Liability" is the third number. What you need to change is that. What's on yours?
Strategy 4: Look at bodily injury liability and change it.
Even though you have to have Bodily Injury Liability Coverage, almost all of us pay too much for the coverage we need. This kind of insurance specifically:
- Everyone who is in a car, whether it's yours or someone else's;
- Any and all people who are in another car;
- And people walking
With this kind of coverage, your only goal is to get just enough protection to protect what is yours, or your assets. And to protect your assets, you need to know what your Net Worth is. Here's a well-known site for figuring out your Net Worth: www.kiplinger.com/personalfinance/tools/networth.html.
Having no more in bodily injury liability than your net worth is a great way to lower your premiums. Most people have coverage like this: If your net worth is $20,000 and you have $100,000 in coverage, you're wasting your money.
And if your net worth is low or even negative, just get the state minimums. You'll need this information to find the best deal on car insurance. Again, you can look up "car insurance state minimums" to find out what the minimums are in your state.
Here are some things to look for to figure out how much coverage you have right now. As I said before, your liability coverage is usually written like this in most policies today: The first two numbers, no matter what they are, refer to bodily injury liability coverage. In this case, each person is covered for $50,000 and the accident is covered for $100,000.
What's written in your policy? Paying more than what you're worth? If so, make a change.
Strategy 5: Review and change your coverage for uninsured and underinsured drivers.
The uninsured/underinsured motorist coverage is a great deal for car insurance companies, but a bad one for you. This fee alone can add a couple hundred dollars to your car insurance every year.
Most people think that uninsured/underinsured coverage is there to fix your car if someone without insurance or with bad insurance hits it.
Wrong.
Your collision insurance premium already covers any damage that might happen to your car.
First of all, check your policy to see if you are already paying for uninsured/underinsured coverage. If you are, type "uninsured motorist state requirements" into Google to find out if it is required in your state.
If your state doesn't require it, you can get rid of it.
If you live in a state that requires uninsured/underinsured coverage, make sure you have the bare minimum. These minimums are not widely known, change every two years, and are hard to find. Here's what you should do.
Do a Google search for your state's insurance department, go to the "Contact Us" page, find a phone number, then call and ask what the minimums are.
Don't even try to find it. Most state websites make it almost impossible to find the minimums because they put them so far down that you'll never find them. Just call the insurance office in your state.
I know it's a pain to find the information yourself. But it's not a good idea to count on the insurance company to give you the right information.
Next is Part 2 of "10 Easy Steps to Save Up to 54% on Your Car Insurance."
