It is mandatory to have auto insurance. You must have auto insurance to prepare for the unexpected: an unintended auto accident. Your choice of insurance has huge ramifications in case of needed repairs, and for our purposes, your compensation in case you or a passenger in your car is injured.
You may be fairly satisfied with your current auto insurance. If that’s the case, good for you. But, we still recommend that you take the time annually to compare your current rates with other auto insurance carriers.
Here are some things to consider when you are purchasing insurance or comparing rates:
- Don’t try to save money by buying insurance from a company with a poor reputation for compensation. Sometimes, you are forced out of the best insurance companies’ pools when you have a poor accident history or driving record or a history of lapses in paying for auto insurance. Do what you can to improve your history of keeping your policy in force and driving well. Check back every six months to see if you can sign on with a more reputable insurance carrier.
- Save money by considering a higher deductible. If you choose a $1,000 deductible instead of a $500 one, you can chop your insurance payments significantly. However, if you have a collision, you better be able to get your hands on $1,000. Make these decisions with your budget and your savings in mind.
- Be aware that your insurance premiums are determined by your driving record and even more so sometimes, by your credit score. Make sure that your credit score is accurate and as clean as possible.
- Take advantage of discounts. If you are a good driver (no moving violations in three years), be sure to ask your agent if there are discounts for this. Teen drivers also can receive discounts for good grades. Again, ask you agent about these.
- Don’t cut corners by cutting coverage. There are minimal amounts that are required by law, but they are minimal. Really consider purchasing the industry standard 100/300/100 or even more if you have high net worth.
- Monitor the cost of comprehensive insurance of your automobile as your automobile ages. At some point, the car’s net worth may be low enough that you are overpaying for insurance.