Car Insurance Checklist…Getting the Best Value

Use This Guide to Help You Find Ways to Save on Car Insurance Without Sacrificing Your Protection

The most expensive insurance policy has gaps that leave you without coverage when needed. Stay focused on value—what you get…for what you pay. Here are some issues to keep in mind.

Selecting the Types of Coverage You Want

When looking for ways to save money, stay focused on the value of what various policy coverages provide. Don’t risk a lot for a little. Liability coverage to pay for causing injury or property damage is something to maximize. Often, it’s not much more essential to have better coverage in these areas, which are your most significant risks in a lawsuit. Be sure to think about your vehicle and finances…can you afford to replace your car, and how much is your car worth? At some point, there may be diminishing returns for having certain types of coverage as your car ages.

Type of Car You Drive

The sticker price, repair cost, safety record, and theft history impact insurance pricing. These factors are translated into rating classes, aka “symbols,” that insurance companies use when setting rates. If you drive a luxury or sports car, it will cost more to insure than a more basic model. If you want to reduce your costs, consider driving a vehicle with a lower symbol. An insurance provider can tell you which cars cost less to insure, which can save you money.

Where You Live

Certainly, where you choose to live is a personal choice for many reasons, but you may want to consider that the history of car theft and vandalism in your town impacts your car insurance rates. It doesn’t matter where you work; it’s where you live that makes a difference. You may not want to move to save money, but it’s certainly something to consider in the future.

Purchase Insurance from the Same Provider

Insurance companies generally offer substantial discounts, often referred to as “multi-policy discounts,” as an incentive for purchasing all your insurance through them. The biggest discounts are often for combining auto, home, and umbrella policies, which can be up to 20%. However, this rule may not always hold true, and you may find better savings without receiving this discount. A knowledgeable agent can help you determine the best money-saving option.

Insure All Household Drivers and Vehicles with the Same Provider

Insurance companies often provide a “multiple car discount” for spouses and children in the same household. Some companies provide multi-car discounts for cohabitating couples and non-spousal family members, so be sure to discuss this with your agent.  This is an easy way to save. Also, the number of drivers listed on your insurance policy can impact your insurance rates…drivers with better records often improve pricing.

Ask About Other Discounts

Insurance companies typically offer various discounts, so ask your provider about the other discounts you qualify for. Remember that discounts aren’t always the key to the best savings or coverage, so focus on the bottom line of price and value.  A company that offers few discounts may still have a lower overall cost. Some standard discounts include:

• Safe driver discounts – no accidents or moving violations in 3 to 6 years
• Anti-theft device
• AAA or other motor club membership
• Passive restraint/airbag
• Low mileage
• Hybrid vehicles
• Good student
• Student away
• Driver training
• Advanced defensive driver training
• Public transit use
• Age 65 or older
• Loyalty discount
• Pay in full
• Group discount –based on your being an employee, alumni, or member of a particular group

Increase Your Deductible

Raising the deductible increases the amount you’ll pay out of pocket if you have an accident; however, the savings on your premium can be significant if you don’t have any claims. It’s a calculated risk, but if you can afford it, the savings in the long run can be pretty beneficial. Be sure you have the deductible available in your savings in case of an accident.

Reduce the Physical Damage Coverage on Older Vehicles

According to some experts, if your car is worth less than ten times what you pay for this portion of your insurance, it may not be cost-effective to maintain comprehensive and/or collision coverage. What you would receive to pay for damages to your car, less the deductible, may not be much more than the premium. However, your potential liability for injuring someone or damaging another’s property isn’t reduced, so these shouldn’t be changed regardless of the age of your vehicle.

Selecting the Types of Coverage You Want

When looking for ways to save money, stay focused on the value of what various policy coverages provide. Don’t risk a lot for a little. Liability coverage to pay for causing injury or property damage is something to maximize. Often, it’s not much more to have better coverage in these areas, which are your most significant risks in a lawsuit. Also, you want to protect yourself in case you are hit by an uninsured or underinsured driver who doesn’t have the coverage to pay for your injuries.

Optional Coverages that Can Be Worth Spending a Little More:

Uninsured & Underinsured Motorist Coverage: What happens if an uninsured or underinsured driver injures you? Do you want to wait for a lawsuit to be finalized before you are paid, or would you instead get funds from your insurance company to make your life easier in the interim? These coverages are provided so that your car insurance can protect you from others who aren’t as responsible as you are.

Substitute Transportation: If you have an accident, how will you get to work if your car is not drivable for weeks?  Can you afford hundreds in rental costs out of pocket?  The small investment might be worth it unless you have a reliable option.

Accident Forgiveness: If you have a clean driving record, accident forgiveness is an option that helps keep your premium from going up the first time you have an at-fault accident. It can save you hundreds, as it takes six years to reclaim a clean record after an accident.

At Murphy Insurance Agency, our knowledgeable professionals can help you compare options among eight different insurance carriers and guide you in making wise decisions about car insurance. Ultimately, you need to decide what issues are important to you and what you can afford to pay for on your own vs. insure against. The key is not to skimp on the coverages that provide essential coverage in case the worst occurs. Saving money is important. Being covered is even more important.