Modifying Your Car Insurance Coverage

For the most part, modifying your auto insurance policy is as simple as contacting your insurance agent. But the question is: What aspects of your policy should you consider changing?

Four Main Modifications

In general, there are a 4 changes you can make to your coverage that could save you a bundle, but you should educate yourself before you call or email your agent:

  • Raise your deductibles - Most car insurers gives significant discounts for higher coverage deductibles. Of course that means paying more should you have an accident, but the benefit, especially over time, is lower premiums. (Fewer claims keeps your rates down too!)
  • Lower your coverage limits - By lowering levels of auto insurance coverage on bodily injury, property damage, and uninsured/underinsured drivers, you could lower your auto insurance premiums. Because this is accomplished by reducing the amount paid out by the insurance company, your protection decreases and could leave you on the hook for the rest.
  • Eliminate some optional coverages - Nothing is free, so consider eliminating incidental coverage like towing, glass replacement, rental car reimbursement, roadside assistance coverage, and others. These are generally inexpensive compared to what you could save on your car insurance premiums.
  • Consider a new insurance company - Rate comparisons are easier and easier to come by these days - and without even alerting your current company that you’re shopping around! If you could save on the coverage you already have, that’s immediate savings. And coupled with the above changes in coverage, your savings only increase.

4 Specific Changes You Might Consider

With your agent’s advice, there are specific changes you can make to lower your premiums :

  1. Ask for a multiple car discount - Because of increased business, most car insurance companies give discounts for multiple car discounts. Ask also about insuring motorcycles or other vehicles as well. Other discounts may be earned if your insurance company can offers homeowners or renters insurance as well.
  2. Reduce coverage on used cars If you have vehicles that are not in the greatest shape or which have a low street value, do you really need to insure them for replacement value, etc.? The savings from lower premiums might do better in the bank. So, here are a few rules of thumb for whether you can drop all but liability on a vehicle:
    • If the car is 5 years or older.
    • If premiums for a year are 10% or more of the car’s value.
    • If the car is already paid for.
    • If you’re in a financial position to repair or replace it.
    • If you have a great driving record.
  3. Maintain good credit Check your credit rating. Insurance companies consider it a sign of responsible behavior that can translate to your driving habits. So, clearing bad reports or false reports can help improve your existing credit. And paying your bills on time will help keep it that way.
  4. Maintain a good driving record While nothing can change the past, driving more carefully in order to avoid accidents and tickets can cause premiums to decrease over time.

Even if you’re happy with your insurance company and level of coverage, it’s still a good idea to review your car insurance needs and compare rates from time to time. By modifying your auto insurance coverage, you can keep yourself protected financially while saving on car insurance. But be sure to check with your insurance agent or another insurance professional: Whatever level of coverage you switch to, you want to be sure that it is in keeping with minimums in your state - and at a level that covers your assets.

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