Why Are You Overpaying for Your Car Insurance?
To drive legally within the United States and other parts of the world, most drivers are required to carry some form of car insurance. What many people do not realize is that they are drastically overpaying for car insurance in a number of ways. Luckily, there are several steps that can be taken to lower your car insurance premiums.
The first way to lower your car insurance premiums is to determine your state’s local laws. Each state or jurisdiction has laws which regulate the level of coverage that is required. Most states require at least some form of liability insurance and medical coverage, while others require the driver to carry both collision and comprehensive coverage. By knowing the bare minimum level of coverage that is required to legally drive, the insured can better determine how they can cut out additional unnecessary costs.
Another way to lower your car insurance premiums is to compare quotes. There are various websites online that will give multiple insurance quotes after an insurance shopper inputs their car characteristics, personal information, and insurance needs. These websites often will be able to give quotes that drastically differ in price from one insurance provider to the next. This is because each insurance provider has slightly different underwriting standards. Also, budget car insurance providers do not have the high overhead expenses that larger insurance companies do, and are therefore the budget car insurance providers able to offer lower prices. Budget car insurance quotes can either be selected or used by an insurance shopper to negotiate with another insurance provider.
The third way to lower your car insurance premiums is to increase your deductible. The deductible is the amount of money the insured is required to pay in the event they are at fault in an accident or if their car is vandalized or stolen. Deductibles often range from $0 to over $2,000, and the higher the deductible the lower the car insurance premium will be. By increasing their deductible just $500, an insured individual could decrease their monthly premium by $10 or more per month. To be safe, the insured should keep the dollar amount of their deductible in a liquid account incase they get into an accident.
The fourth way to decrease car insurance premiums is by getting rid of unnecessary insurance coverage. As mentioned earlier, collision and comprehensive insurance coverage are not required by law in most jurisdictions. Despite not being required, these levels of coverage are still selected by many drivers because of pressures placed on them by insurance providers. If the insured happens to drive a car which is not very expensive and they can afford to replace the car in the event of a total loss, then carrying collision and comprehensive insurance is a waste of money. By cutting collision and comprehensive car insurance coverage, an insured could cut their car insurance premiums in half.
The last way to save money on auto insurance premiums is to switch from monthly payments to semi-annual payments. While insurance providers offer a monthly insurance option to their customers, they often charge a 10% to 20% fee if the insured selects to pay monthly as opposed to semi-annually. This extra fee could add up to hundreds of wasted dollars each year.