Tune up Your Car Insurance - Check these Five Important Elements
At a glance, it may seem like car insurance policies are all the same. The truth is that each policy is designed specifically for the driver it covers. Your insurance rates are determined based on your personal demographics. If you talk to a neighbor who drives a similar car and is around your same age, you may be surprised to discover how different your rates are.
To get the most out of your personal car insurance policy, you can put together a coverage package that really suits your needs. Settling for the least expensive policy that offers the minimum legal requirements could leave you paying thousands of dollars out of your own pocket if you are ever in an accident. You can fine-tune your car insurance by purchasing extra coverage where necessary and eliminating unnecessary coverage so that you still save money without leaving yourself unprotected.
Does Your Coverage Fit Your Car?
The age and condition of your car makes a big difference in the type of insurance policy you should carry. If your car is 3 years old or newer, your best bet is to carry a full comprehensive coverage policy. Repairs and replacement parts for new cars can be expensive, but they will not come close to being as expensive as the car itself. Cars that are 5 years old or older have devalued far enough that there may be some question about whether it is less expensive for the insurance company to cover the cost of a repair or just declare the car totaled. If your car's value is less than the potential repair value, there is no reason to pay the extra cost of a comprehensive insurance policy.
Are You Protected From the Most Expensive Problems?
Every driver should carry the highest level of liability coverage as possible. This coverage will protect you if you are ever found at fault in an accident. The legal state minimum liability coverage only goes so far when you face thousands of dollars of medical bills from a passenger or the other driver involved in the accident. If the injury was severe, you could be looking at years of medical bills that your insurance would need to cover.
Another concern for your liability limit's ability to cover your expenses after you cause an accident is that people have begun to sue negligent drivers for expenses other than simple medical and vehicle damages. It is common for spouses of injured parties to sue for as much as $100,000. That is far more than the legal minimum liability coverage. If you can afford liability coverage for as much as $500,000, it could save you a lot of money in the end. If that is too rich for your blood, consider raising your liability coverage as much as you comfortably can.
Did You Choose the Right Deductible Level?
Deductible levels make a big difference in your out of pocket expenses. When you keep your deductibles low, you pay more for your premium - but you do not have to pay as much before the insurance company begins paying toward a claim. The impression you get when you consider carrying lower deductibles is that the insurance company will pay out more for you. The truth is that you pay the difference between the higher and lower deductibles with your higher insurance premium.
Changing your deductible level is a bit of a gamble. If you are never involved in an accident, your deductible level doesn't matter. If you choose to go with a higher deductible, you will keep all of the money you would have spent on the low deductible premiums and never be penalized. The trick is to avoid accidents. If you pay for the lowest deductible and never have an accident, though, all the extra money you are paying for your low deductible gives you no benefit but peace of mind.
The best way to choose the right deductible to balance your out of pocket expenses is to choose the highest deductible that you could pay off if you were ever in an accident. If you have a comfortable emergency fund, you could save quite a lot of money by raising your deductibles as high as possible.
Do You Have Appropriate Supplemental Insurance?
It is important to carry an adequate amount of supplemental uninsured motorist coverage. This coverage protects you when you are involved in an accident with someone who is uninsured or carries limited liability insurance. If you or your passengers suffer injuries in an accident that is not your fault, you do not want to rely on the other driver's insurance coverage to meet your medical needs. If the driver at fault has limited insurance coverage and limited personal funds, you may find that you need to bear the brunt of your medical costs. Supplemental uninsured motorist coverage can fill in that gap. Compared to high medical bills, the cost of supplemental insurance is relatively insignificant.
Are You Taking Advantage of as Many Discounts as Possible?
Insurance companies offer discounts for several different reasons. You could qualify for a discount if you have avoided accidents or moving violations for three consecutive years. You could earn a discount through maintaining a B average in high school or college. Some insurance companies offer discounts for people who work in specific industries or are members of specific organizations.
Your car's anti-theft equipment and safety features can also earn you a discount with many insurance companies. If you do not drive very many miles in a year, you could qualify for a discount. It is even possible to earn a discount by insuring more than one vehicle with the same insurance company in most cases. Every insurance company's discount packages are different. Make sure you discuss possible discounts with your insurance agent so that you can feel positive that you are earning all of the discounts you qualify for. The money you can save without changing your policy at all may surprise you.