Car insurance can be expensive these days. Especially when families are already strapped for cash, the last thing that anyone wants to worry about is having more costs piled on. If you are struggling with these tough financial times or would just like to reduce your costs to keep some extra money in your wallet, these insurance money saving tips are for you.
Drop Optional Coverage on Older Cars
There are certain types of car insurance that we must pay by law. These include injury liability insurance and property damage liability insurance. All other types of coverage are, contrary to popular belief, optional. Two of the most common optional coverages are comprehensive coverage and collision coverage. Comprehensive insurance protects your vehicle against non-accident related damage, such as vandalism, storm damage, or fire. Collision coverage covers the cost of repairs to your vehicle if you are in an accident and the other driver cannot be determined to be entirely at fault.
While these types of coverage are important protections for newer vehicles that are worth a lot of money, it may not be affordable to keep these coverages on an older vehicle. Cars depreciate as they get older, and since insurance companies usually set their maximum payout at the car’s cash value, these coverages also depreciate with time. This means that the money spent on comprehensive or collision coverage on an older car may exceed the amount of money that you could get out of the coverage. Therefore it may be in your best interest to drop these coverages from older vehicles.
Increase Your Deductible
If you have a low deductible, you are likely paying very high monthly premiums on your car insurance. Consider how much you could realistically afford to pay out of pocket if you were to have an accident, and if this number is higher than your current deductible, consider increasing it. A higher deductible will result in lower monthly premiums, which could save you hundreds or even thousands of dollars in the long run. It can also help to make your current bill more tolerable while times are tough.
Take Advantage of Good Driver and Good Student Discounts
Contact your insurance to see if you qualify for a good driver discount that you may not currently be receiving. If you have not been in an accident for an extended period of time, you may be eligible. Also, if you have kids in school who are included on your policy, you may be able to receive a discount for good grades. Most insurance companies simply ask for a report card each semester and then deduct a percentage off of your monthly premium.