Insurance is one of those life purchases that can be frustrating to deal with. You know that you need it, but very often you pay it for years and get no tangible benefit. The key thing to remember is that you are getting an intangible benefit: the peace of mind of knowing that some type of loss is covered if you incur it. Life insurance will help your family financially if you die, homeowner’s insurance will replace or repair a damaged home, and vehicle insurance will cover your financial needs in case of an accident.
As we work on saving money, we often find that insuring our transportation is one area in which we can see a lot of improvement. There is as much variety in insurance companies as there is in the automobiles themselves, so it’s up to you to work on finding the cheapest option to cover your needs.
Focus On Liability
When we buy a car, we must first get insurance. If we have borrowed money for the vehicle, we must carry full coverage, also known as comprehensive coverage. This is a requirement so that the lien holder, usually a bank, can be assured that you won’t incur damage to the vehicle that undermines its value should it be repossessed. It covers things that are either your fault (an accident you caused) or are considered acts of God (hailstorms, animal collisions, and so on). Simple enough.
But down the road, many people pay off vehicles without making any changes to the insurance. Once the debt is gone, you are no longer obligated to carry full coverage insurance. If you do, you may be paying more in premiums over a few years than the vehicle is worth, so you’re better off to drop the full coverage and pocket the money as an emergency vehicle fund. If you do damage the car, dig into that fund for repairs.
Sniff Out Discounts
Saving money on car insurance requires that you be proactive. Don’t just approach an agent with a list of your VIN’s and license numbers. Ask what will save you money. Many companies have discounts for military veterans and good students–a special bonus for those of us insuring a teen driver.
And keep insurance in mind when you’re buying a car. There are discounts for airbags and anti-theft systems. Two-door vehicles cost more to insure than four-door. Convertibles are typically much higher.
The point is this: Don’t just assume you’re the same customer as the one who just left the agent’s office. Make sure you walk through your unique characteristics with the company and get every discount that you have coming.
Be A Safe Driver…And Prove It!
Insurance premiums are all about the risk that you present. Your four-door sedan will cost less to insure than a high-powered sports car because the expectation is that you will drive each vehicle according to its capabilities.
Of course, you don’t have to be a in a hot car to have a lead foot. No matter what you drive, your premiums will go up if you get a speeding ticket. So when you hit the road, make sure that you have good driving habits. Use your cruise control to avoid speeding. Leave your phone out of your sight. And never, ever, drive while impaired by alcohol, prescription medication, or even lack of sleep.
To get even more benefits from these good habits, take a driver safety course that will document your understanding of how to be safe on the roads. These certifications, if given by a credible institution such as your state, can also save you money on premiums.
The most important thing about insurance is to accept that you may not ever need it. Instead of getting a feeling that it’s a waste of money, focus instead on the secure feeling of looking back over the years and knowing that you were worry-free and protected from a financial disaster.
With some resourcefulness and an investment of time, you can achieve that same relief with a much smaller price tag. Take the time to research your options, find one that works for you, and get signed up.