Stop paying too much for car insurance

These poor decisions could be costing you hundreds of dollars in extra premiums each year.

By Gail Vaz-Oxlade | Online only, 24/01/13

Tags: auto, auto insurance

 

Sometimes when I look at a body’s budget and I see what they’re paying for car insurance I gasp. The biggest monthly premium I’ve come across was $535 a month. How did the premium get so high? A couple of accidents, a charge of driving with a suspended license and other idiotic moves. 

But you don’t have to be a bad-driver to see your insurance premiums high-step to new levels. A mistake or two, combined with rising rates across the industry, can throw your budget out of balance.

My advice is to trade that expensive, foreign car in for a less-expensive domestic model. Sports cars cost more to insurance because they scream: I’m going to speed. And avoid cars that tend to attract thieves. Years ago my then-husband’s high-end Jeep was stolen right off our parking pad. Several months later they came back and took its replacement. The lesson: no more Jeeps. Two-door Integras are stolen far more often than are four-door CSXs. And Audis are ripped off far more frequently than Buicks. You can check with your insurance broker to see what the “hot” models are so you steer clear of higher premiums.

Increase your deductible. If you take your deductible from $500 to $1,000, and add the difference to your emergency fund, you’ll see a drop in your premiums. And if you eliminate coverage you no longer need–think collision and comprehensive coverage on older models–you’ll save even more.
Stop getting tickets. For each moving violation you get, your premiums inch up, until you hit three when they take a giant leap. Accidents and tickets stay on your driving records for years and ratchet up your rates.

Make sure your loyalty counts. While some companies reward loyal customers with lower premiums, don’t let a loyalty discount stop you from saving money. If you think you may be paying too much for insurance, shop around. If bundling your home insurance with your car insurance will get you a better rate, do it. And if making your kid take a driver’s education course means you won’t have to pony up your second-born, spend the money to save even more.