How Decrease Your Auto Insurance Premium by 40% or More.
Posted: November 5th, 2008 | Author: Joe | Filed under: Insurance, Saving | Tags: Insurance | 7 Comments »
I live in the great state of New York. This is mostly because I have friends and family that I don’t want to leave. It’s ok, most New Yorkers I know feel trapped. We’re one of the most heavily taxed states in the union and still have a $6 billion deficit. Aside from that, we’re also one of the states where auto insurance is mandatory.
That being the case, most people buy auto insurance when they get their own car and their parents kick them off their policies. Young drivers tend to hike the premiums on the older, usually more cautious parental drivers. But most people get their car insurance policy in late teens or early 20′s, and never think about it again until they get a new car or start a family.
I know I didn’t think twice about it. It was a hassle. It was expensive, but isn’t that what insurance is supposed to be? Wrong! It’s supposed to be expensive when you’re young, because you’re more likely to get into an accident and insurers want to cover their losses. But once you have 5 or more years under your belt, you can likely get a better rate if you shop around. I recommend insweb.com for quick comparisons. They also allow you to contact various insurers so you can get more info, but it’s a great place to start.
Besides shopping around, you may want to consider raising your deductible. Simply raising your deductible from $200 to $1,000 could save you up to 40% on your premium. Don’t worry about being able to afford the repairs should you get into an accident – that’s what the emergency fund is for!
Think about it: if raising your deductible from $200 to $1,000 cuts your monthly premium by $65 (as it did mine) then it would take only 12 months to save up that $800 difference just from your savings. Plus you’ll go from paying $800 per year to the insurance company IN CASE you incur damage more than your deductible, to earning interest on that money in your savings account. And the $65 is gravy after the initial 12 month ramp up to cover the difference.
One last tip to consider is to make sure you are getting any discounts you are entitled to: anti-lock breaks, perfect driving record, defensive driving course, using the same company for auto and home owner’s (renter’s), etc…
So, how are you going to spend this extra money? 
Great tips!
Raising your deductible is an easy way to save a bit of cash on insurance premiums. If you are financing or leasing your vehicle, make sure that you’re allowed a higher deductible- some financing companies require certain coverage limits.
If you’re car is older and not worth a lot, you might also want to consider dropping collision and theft coverage altogether. Sometimes the potential cost just doesn’t justify the potential benefit.
And BTW, I was surprised to learn that there were ANY states where insurance coverage was optional. That’s a scary prospect if you get hit and seriously injured by an uninsured driver.
I agre, this is one of the best blogs i’ve seen on this subject.
Great post. I don’t live in new york, but I have family that does and they are in 100% agreement with you on the comment about being the highest taxed state in the union and still having a huge deficit. That’s just criminal. But back to the insurance. I agree with the previous commenter that this a great blog and also that if you do have an older car it is wise to just drop the collision if the premium and deductible is going to cost you more than the car is worth. great post.
This is a pretty informative post here. Decreasing auto insurance premiums is a huge subject in NY and also in places like CA. There are a lot of useful tips, like all the discounts that you may be eligible for but didnt know about. Also changing the premium and deductible can save a lot, depending on the risk of your vehicle.
Most people buy whatever their insurance broker sales them. And most will not sell the “State Minimum Package”. If you have few assets and your car is old go with the miniums. Also rates are lower if you drive less. Make sure you are only paying to be covered for the actual amount of miles your drive. If you drive back and forth to work, then tell them that. No point in overpaying. The more the Broker can sell you the more they make. But that works against you.
New York, California, Insurance is a mess. I still remember those early years. No fun for the driver or the parents but a necessity. I was in the state fund, don’t remember what it was called (I’m 64 yrs old now) but once you opted into that fund someone “had” to insure you and so many of us teenagers wound up there. Your post is great, straight forward information that anyone can understand and you’ve laid it out for them very nicely. Very well done. All the best.
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