Saturday, January 9, 2010

Industry secrets that will help you save money on auto insurance

It doesn't matter whether you're dealing with a car insurance company or an agent, never expect the whole truth. Whether they are trying to boost their commission or just sweet-talking you, it's rarely in their interests to tell you the full story. Always keep in mind what they don't tell you is probably the thing that could save you money. Things like this:

1. Cancel the collision premium if your car is old.

If your car is 7/8 years old and worth less than $2,500, it's likely your excess is close to the value of your car. So why pay for comp and collision premiums? A major collision will probably write your car off anyway so it's wasted money.

2. Don't use the same company for both home and car insurance

Unlike many bundle deals available today such as broadband internet and TV, it is rarely cheaper to bundle your home and car insurance. While many companies offer great deals on either type of cover, they rarely offer great deals on both. Unless you buy an umbrella policy, a bit of research is likely to show keeping your policies separate will return better savings.

3. Beware of minimum liability cover.

The law requires that you have a minimum level of car insurance. Some companies or agents will happily offer you a low liability policy but they might not inform you that state-mandated limits in certain states are extremely low. If you have a serious accident in these states, it is very likely you won't even come close to covering the costs and if at fault, could end up paying a lot more than expected.

4. Research and compare rates before buying.

It isn't in the interests of insurance companies and agents to advise you to search for the best deal. It is difficult to know what a good deal is when not even independent agents represent many insurers. Using comparison sites will allow you to research many companies in one place, customize the policy that suits you best and compares the rates.

5. Check for environment-based discounts

Many insurance companies will encourage you to go green by offering discounts. If you choose an electronic payment plan, paperless statements or you sign your policy with an e-signature, you could be entitled to a discount. Savings are also available for hybrid drivers. Remember that if you save your insurer money, they should pass the saving on to you.

6. You might be able to afford a sport car - can you also afford the insurance?

The size of your premium depends on your car - how old it is, how expensive, etc... Not only should you shop around carefully for car insurance, you should also shop around carefully for the car that the car insurance will cover.


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