Auto Insurance: Can You Cut Back?

There’s no getting around auto insurance; you’ve got carry at least the minimum to be legal on the road. Premiums are continuing to climb, especially when it comes to vehicle insurance.

The average cost of auto insurance in the United States was $795 in 2007. As insurance regulations change, this average is expected to increase substantially. But just because you’re required to carry at least liability insurance, doesn't mean there aren't ways to cut costs without sacrificing the required coverage you need and optional coverage you want.

Shop Around

Just because you've used the same insurance company for years, doesn't mean you can't find a better deal elsewhere. It doesn't hurt to see what rates and coverage you can get from another company. It's very easy to compare rates online. Many websites allow you to compare rates based on information such as the age of your vehicle, where you live and what coverage you need. If you don't want to change insurance companies, use the information you collect to negotiate a better deal with your current insurance company. No company wants to lose your business. Most companies are willing to make an effort to keep you from switching to the competition.

Combine Coverage

Take a look at your coverage. If you have multiple polices for multiple vehicles, you may be able to bundle coverage to include all vehicles. You may also be able to combine all types of insurance coverage with the same company, if you haven't already done so. Many of the larger providers cover everything from homeowner's policies to health insurance. Insuring your vehicle with the same company that provides your health and life insurance coverage is likely to equal savings for you.

Look for Discounts

Insurance companies, by nature, are extremely competitive. This is good news for you. Almost every auto insurance company has some discounts available. While companies such as Progressive brag about their discounts, you can actually find similar discounts with AllState, State Farm, Geico and Nationwide. The most common auto insurance discounts include:

• Safe driver discounts

• Loyalty discounts

• Driving course discounts

• Combined coverage discounts

• Retirement discounts

• Safety feature discounts

• New vehicle discounts

Some companies offer unique discounts such as good grade discounts, discounts for college students who live far away, discounts for paying for the entire policy upfront and even discounts for signing up online. If you're just signing up for auto insurance, some companies will search for discounts for you. Discounts tend to vary by state, but odds are that you qualify for at least some discounts. You never know unless you ask.

Eliminate Unnecessary/Duplicate Coverage

If you haven't changed your auto insurance coverage in years, you likely have some coverage you no longer need. This may include everything from vehicles you no longer use or you may have vehicles covered you don't even have anymore. You also want to look for coverage options you just aren't using. Some optional coverage choices you may want to drop include CD/DVD coverage and loan lease gap coverage. Consider dropping collision and comprehensive coverage on older vehicles with a low market value. If you have the same coverage with different policies, consider dropping overlapping or duplicate coverage to save a few extra bucks.

If you want even more savings, consider increasing your deductible. Bumping up your deductible by $200-300 can drop the cost of your coverage by as much as 30 percent. Additional sources of savings can include using carpools more often to get to and from work, purchasing a low-profile vehicle and getting roadside assistance coverage separately. If you have existing coverage, start by talking to your insurance agent. You might be surprised what discounts you can get when armed with a little info. If you're looking for coverage, shop around and look for discounts. In either case, your best weapon is knowledge.

Author Sandy Landsford is an accountant who blogs for carinsurance.org.uk, a site where you can get cheapcar insurance. Get a quote today!

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