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Living Check to Check
Excerpt from Chapter 4

Driving Your Auto Insurance Rates Down.

I will not avoid the obvious savings method, that is to shop around and start driving safely.  You may save 25% or so on your auto insurance; however, you will not build a relationship with an agent that will help you save money in the future.  You can search the Internet, but make sure you use a reputable company that will be around for a pay off when you need them.  What will happen when you need someone to explain your coverage and look out for your best interest? Well, you go back to the Internet for the information that will educate you on the needs and terms in the industry.  I would recommend shopping around only if its your last resort to saving money. Go to your current agent and ask how you can reduce your premiums.  Give them an opportunity to keep you as a client.  You will be surprised how low they go then.  Dont beat them up; just take the savings and run.  If you are upset that your agent didnt tell you how to have the same coverage for much less or the right coverage from the start, then determine whose interest they have at heart.  Then, make a decision to do what is right for you, and not what benefits the agents pocketbook.  Most agents are very good and provide the coverage that you need; however, there are a few that are looking out for themselves and for their commissions only.

Raise your deductible to twice what it is now, if you have a credit card to cover the cost of the deductible, when you have to file a claim.   Take the savings from raising your deductible on your auto insurance and invest that amount until you have saved the total amount of the deductible on your policy.  Once you have saved your deductible there is no need to use the credit card should you need to file a claim because you have the cash.  Keep saving that amount and do not spend it.  For those that are a little scared to use this method, save the cash first by implementing some other money saving techniques that are in this book.  Once you have saved the deductible amount in cash, raise your deductible.

If you have children that drive and they live with you, put your children on your policy instead of their own. Drivers ages 16 to 25 have the highest rates of all, so add them as an additional, part time, weekend only, or sometime driver instead of getting their own policy.  This will save you a ton of money.  If your child/children get good grades, many companies offer discounts for students with good grades.  Be sure to ask your insurance agent if your company offers that benefit.  Many times children will continue to stay on the parents policy even while they are in school without a car.  Let your agent know they will not have the family car while away in school and that their driving opportunities will be limited.  You may be able to save even more.  Be sure and ask.  This type of discount information typically, will not be volunteered.

Many times when children get old enough to earn money, they want to buy everything themselves to show their independence.  When your child is considering purchasing a car, let them know that their insurance will be much cheaper if they use the strategy mentioned above.  If they insist on the car being in their name, suggest they get the insurance in their name also, but to check the rates first.  When they see the total cost of that method, chances are they will opt for your guidance again.  The other tip is to teach your child to drive, but also encourage them to take a drivers course in school or use a qualified/certified driving school.  This could save you additional money when it comes to insurance.   The good thing about buying insurance in your name for your child, is that your overall premiums will go down per vehicle because you should get a multi-car discount. If you are paying the insurance anyway, the rate will be much lower than if the child/children purchased a policy for themselves. Keep in mind; the most expensive automobile insurance is for unmarried males under 25 years old, that do not have a diploma or a degree. This is another good reason to stay in school. 

Another tip is not to file a claim on your policy if the damage is less than your deductible.  This is especially true when you badly scratch the car on the parking post or something of that nature.  Since you would pay the deductible in cash anyway, why risk the increase in premium by filing a claim?  However, when others are involved, it may be a totally different ball game in this litigious society.  In all cases, follow the law. 

Auto insurance agencies sometimes will include things in your policy that will create double coverage.  Check and see if your auto policy has medical coverage, prepaid towing, car rental, and similar items of that sort.  If you have medical coverage in another policy (i.e. Health), only one will pay.  Its called coordination of benefits.  Stop paying for medical coverage if you have medical insurance elsewhere.  This action will save you money that can be applied to implementing your Financial Freedom plan. 

Free towing is another extra that many people have on their auto policies.  The question to ask yourself is how often you have car accidents and determine whether it is worth it or not.  Many car manufactures now have free towing if you keep the service record on your car up to date.  Check and see if your car manufacturer has this feature.  If it does, drop the prepaid towing and get it for free from your car manufacturer. 

Another benefit that may be on your policy is a rental car at reduced rate.  Ask yourself again, how often will I have a need for this service?  Then determine if you want it or not.  Chances are, you are better off becoming a member of an auto club like AAA.  You will typically get all these benefits for much less than your policy would charge for them.  Take your savings and join AAA.  More than likely, there are other benefits you may get from AAA when you become a member, that go beyond your automobile.  Finally, check with your car dealer to determine if you have this type of coverage included in the purchase of your vehicle.  Many manufacturers include this type of coverage with the purchase of the vehicle until the warranty is expired.

Try to insure your car with the same insurer that provides insurance for your home.  Many insurers give a multiline discount.  This means if you have your homeowners insurance and car insurance with them, you will get a discount.  Check and see how much you can save by doing this and apply the savings to help you meet your goal.  Make firms beg (bid) for your business.

Most insurers will give nice discounts for a safe driving record.  This is another reason not to drink and drive.  They will also discount your policy if you have a car alarm with an engine kill switch.  Many newer models already have this feature.  Make sure you tell your agent about it.  Most insurers also give discounts for airbags, antilock brakes, and vehicles they consider to be safer than others.  Legislation may change soon, as Sports Utility Vehicles have become so popular on the road.  In addition, often you will get another discount if you maintain your car in a garage.  These little things can make a big difference in your premiums.  Make sure you are getting the benefit for having them.

Why The Car You Want May be An Insurance Nightmare!

Before you purchase your next vehicle, check the insurance rates of the cars you have in mind.  Different cars have different rates.  Therefore, you must consider the total cost of owning that particular vehicle. Many times, you can own a more expensive car because the insurance cost is substantially lower than a less expensive car.  When you look at the total cost of:  car note, insurance premium, gas (gas mileage of vehicle times miles driven), maintenance, you really have to do your homework and see how and what car will really be the best deal.  So check insurance rates, mileage charts, and consider the total cost of owning a vehicle before you make a purchase.  When you do this surely you will save money.   You will learn more on Total Cost later.

If you are insuring more than one vehicle, drive the less expensive one back and forth to work if possible.  If you drive the more expensive one to work your insurance cost will be greater.  I experienced this when I commuted to work in a Mercedes Benz.  I later purchased a SUV and informed my insurer that I was driving that vehicle to work and my rates were reduced dramatically.  Also remember to change your policy if your driving habits change.  If the number of miles you drive changes or goes down, you may be eligible for a lower rate. 

When talking to your auto insurance agent, request rates with different deductibles.  Ask them to give you 3 or 4 quotes ranging from $250 deductible to $1000 deductible.  By doing this, you can see the savings cost of increasing your deductible.

Be sure to read your policy to determine your current coverage, what you need, and what you do not need.  After assessing your policy, take action to realize the many money saving opportunities mentioned in this chapter.

Discounts on insurance, because you belong to an organization, will go unrecognized unless you tell the agent.  Ask your agent which organizations they give discounts to.  Tell your agent if you are a member of one of those  organizations.  This obviously will save you more money.  Other organizations that save are the military, government organizations, and senior citizens with a good driving record.  The greatest tip is to ask your agents about discounts.



Copyright 2003 by Kermit T. Wyche
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Published by Kermit T. Wyche

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