Auto insurance is mandatory in most places all over the world. That means you must have it. It is generally made up of two parts, physical damage coverage and third party liability coverage. Physical damage coverage is self explanatory and covers things such as accidents, vandalism, hail, fire or other acts of nature. Third party liability coverage proves your financial responsibility in respect to property damage or injuries you may cause. In order for insurance to take effect, the damage must be accidental, not intentional.
Third party liability coverage shouldn’t be an area where you try to save money by not carrying enough coverage, especially in the modern world of potential lawsuits at every turn. A good way to save on your premiums is to adjust your physical damage coverage. Try to compare a number of companies in your area for the best prices and coverage’s. Some other factors that may determine premiums are the type of vehicle you drive, your driving and claims history, and your age.
For example, if you are a younger, less experience driver who owns a red sports car, your premium will probably be higher than average, so keep in mind that you do not need a low deductible. Even though your agent may recommend it, it is good to remember they sell insurance for commission. Keeping your deductibles high reduces your premiums. There are two types of basic physical damage coverage’s available, collision and comprehensive. You may be able to choose different deductibles for these coverage’s if you would like to.
Collision coverage is for accidents involving one or more vehicles. Comprehensive coverage is for things such as vandalism, hail, lightning and fire. If you chose the maximum deductible for both your premium will be low, but you will pay that deductible if something happens, so keep your emergency budget in mind as well.
There are other coverage’s available in most places that most people do not require. Road Hazard Glass coverage is one of these. Call your local auto glass company for a quote on replacing each window in your vehicle. Are they overly expensive? If you drive a common vehicle then probably not. Drop that coverage if you think you can afford to pay for the window yourself.
Some insurance companies offer a loyalty discount, otherwise known as a multi-line discount. If you have your property or contents insured with them, ask about their auto insurance rates and if you would qualify for their loyalty discount. If not shop around for both. Loyalty discounts are usually applied to your home insurance and can range from 5% – 15% of the total premium. Always talk to your insurance agent and ask if there are any additional discounts you qualify for, such as age discounts or good driver discounts.
A final tip is to not pay your insurance premiums monthly. Although it has nothing to do with your actual premium, if you pay monthly you also pay service fee’s. If you can pay up front you save even more. If you cannot pay your whole premium you will have to pay monthly, but may be able to pay off the balance quicker for a lower interest rate.
Remember to always shop around for the best coverage’s and rates, find a good agent who really cares and stick with them.