If you ever plan to motor west…, Insurance Part II

Yesterday I talked about how insurance premiums are calculated. After reading it again, I thought to myself, “Wow! That sucks. Isn’t there something that can be done about this?” Well, there are several options that will help you maximize your savings.

1. Think about your car. When you are shopping for cars, think about the effects on your insurance. Talk to your agent and ask them what this new car will do to your insurance. This may make a difference in whether or not you should buy the car, or if you are even ready to buy a car.

a. Just so you know, the sportier the car, the higher your premiums will be. There’s something really cool about driving the granny-mobile.

2. Choose a higher deductible. Okay, here’s how deductibles work. If you need to make a claim, you will pay a certain part of the total up-front. This is a deductible. We’re going to hope that you don’t get in an accident or get your car stolen (who wants to steal the granny-mobile anyways?), so you will have time to save for that deductible. You need to save that deductible and put in an account that you won’t use except for insurance (car) purposes. If you never, ever make a claim (my dad went about 40 years before he had to make a claim), you just have some extra savings. Nothing bad there, right?

3. Talk to your insurance agent about what discounts are available. Since you are young and possibly still in school, ask if there is a discount for good grades. Of course, this means you have to actually GET good grades, but the savings make it worth it. Some companies just make you take a class. Once the class is over, you get a discount!

4. Be a smart shopper. At least once a year, shop insurance carriers. If you can get a better deal somewhere else, consider moving. Ask your carrier first if they can beat or match, but understand they are a business, and they won’t take it personally if you go somewhere else.

4a. Don’t follow this advice if you have a long and positive history with your company. Example: I’ve been with my same insurance company for well over a decade. My parents are with them, many people in my family are with them. These people really take care of us. They will call us to let us know about potential discounts, problems that might be coming up, or anything else that may be important. They have also given me absolutely exemplary service when it came to claims I have made. Quick service, no hassle with getting paid, not getting low-balled on payment. They don’t need to do this, and most companies don’t, so I’ll pay a little extra because they do.

5. Limit the miles. Do what it takes to drive less miles per year. Carpool when you can. Got a quick errand down the street? Walk. Live close to work or school? Ride a bike. Plan your errands out so you make the least stops and the least driving. You will save money, you will save your health, and you will save the world.

6. Slow down. Wear your seat belt. If you are a more careful driver, you won’t need to file as many claims. As you get years of experience, your insurance premium will go down.

7. Take care of your credit profile. Check your report annually for errors. Pay your bills on time.

The law says we need insurance. The law doesn’t say we need to pay through our blood to have insurance. Look for ways to minimize your premium. I have long believed if you can do something well, and save money doing it, that is a good thing.