Risk is the name of the game when it comes to insurance. When you apply for a policy, the insurer, is evaluating whether you are a good or bad risk. The bigger risk there is of having to pay out money on your policy, the more they are going to charge you.
As much as you might dislike paying for auto insurance, you have the ability to pay less by understanding how the process works and how it can be manipulated. There are a few different strategies that can be used to do just this.
When we discuss risk, what are we really talking about? Fear. As in the fear an insurance company has that it will have to pay out on the policy you are buying. Fear is risk. The more risky a bet you are, the more nervous the insurer. This means the key is to lower the risk artificially.
The rule of KISS is a perfect one. KISS stands for Keep It Simple Stupid. This is the aim of our first step. With it, we are going to focus on something known as the deductible for the car insurance policy. Most come with three options - $250, $500 and $1,000.
If you want to cut your insurance premiums, try raising your deductible rate. An increase from $250 to $1,000 will save you a huge amount. Why? This change pretty much eliminates all the small claims you might make. That lowers the payout risk.
Another method for cutting your insurance premiums is to eliminate coverage you dont need. Your car insurance is actually a collection of coverages. Each has a cost so lowering even one can make a world of difference in your premium rates.
If your car needs to be repaired or replaced, you must have comprehensive coverage in your insurance. That being said, you only need as much as your car is worth. If you have a $5,000 car, you should not be paying for $50,000 in comprehensive coverage. Adjust it and your rates will plummet.
Do you have health insurance through your job? If so, why are you paying for medical coverage on your car insurance? Do you enjoy paying twice for the same thing?! You should not. Check to see if your policies overlap. They almost always do. By eliminating your auto insurance version, you can save big bucks.
Most people just pay what they are told to when it comes to their insurance. This is particularly true when it comes to car insurance. This is really a mistake. Know what is in the proposed policy and eliminate what you don't need. Doing so will save you money this year and ever year after that.
You are nobodies fool. The car insurance industry makes money by seeking out the unwary. Do not be one of these peope. There is no plausible reason to throw away money on insurance coverages you do not need, so don't do it.
