I was recently interviewed for an article on saving money on car insurance by Newsday (NY). They were asking insurance experts on the best strategies for saving money. I will share my response with you for your benefit…
My strategies on saving money on car insurance:
Increase your physical damage (comprehensive and collision) deductibles, especially for luxury and high-priced vehicles. The premiums are based on the value of the vehicle, so the higher the value, the higher the premium. Increased deductibles ($1000 and up) will save on insurance premiums.
Avoid moving violations and at fault accidents. I know this might seem obvious, however driving behaviors can be modified to reduce the risk of tickets and accidents. Insurance companies do experience rate and even two tickets can have a dramatic impact (negatively) on your premium. Bottom line – have a “clean” driving record and your premiums will be optimized.
Competitively shop your insurance at least every 3 years. This can either be done on your own or through your insurance agent. Jumping ship from your current insurer for a few bucks is a bad practice. However, it is important to see what the market is doing based on exactly the same coverages. 2-3 years is a good timetable to do this.
If you have young drivers, make sure they have a good grade-point average (3.0 and better). Good student discounts can be as significant as 30%.
Don’t double spend. If you have a service like AAA, you don’t need to purchase towing on your vehicles. You may not even need rental reimbursement if you have several cars. Even though the premiums might seem low, if you’re never going to use them, why buy them?
I was just quoted in this new online article on distracted driving and cell phones. The question at hand – is this an obsessive-compulsive disorder? Interesting research…I weigh in on the insurance part of it. Worth the read to the end (that’s where I’m quoted)!
I was just interviewed for a story in a parents magazine on how to save money on car insurance. I’m happy to share the tips, strategies, and suggestions with you…
Here are few quick “tips” and suggestions to significantly reducing personal auto insurance costs…
Raise physical damage deductibles as high as you can “stomach.” The more expensive the car, the more you will pay and the more you can save with higher deductibles. (Note – this is your comprehensive and collision coverages)
Shop your auto insurance policy competitively every 3 years at a minimum. Rates and company appetites change and you need to be current on your options.
Deal with a real person. These online programs may appear to save you money, but unless you’re an industry expert, you don’t know what you’re actually buying. You may save money initially and lose it when you are either not insured or underinsured. Use a professional.
Make sure you’re receiving all the “credits” you are eligible for. Companies give discounts for good students (your young drivers which really raise your rates), non-smokers, no claims, multiple policies, multi-car, etc. Ask for a list of all available discounts.
Make a deal with your teenage drivers. If they don’t qualify for a good student discount, then they don’t get licensed. Seem harsh? Yes, but the cost to insure a student without the discount can be as much as 35% more expensive! I did it with my two daughters and it works.
Do you have employees who drive for you and use their personal vehicles? If so, check their insurance limits. If they are using their vehicles for business use and get involved in an at-fault accident, you could be brought in if they are uninsured or underinsured. Two rules of thumb here:
1. Create a minimum limit of insurance (I recommend $100,000)
2. Make sure you have Non-Owned & Hired Auto Liability coverage
This issue is most prevalent with sales people, contractors, executives, and delivery people.
Don’t get caught on the short end of the stick if your employee isn’t properly insured. Check for their insurance…it’s your right.