3 Auto Insurance Options to Increase Your Savings

Securing the right type of auto insurance is more involved than calling an agent or filling out an application online. If you really want to get the best possible scope of coverage for a rate that is kind to the household budget, understanding which options and terms are available will make a huge difference.

This will involve identifying the different types of auto insurance coverage, selecting the best combination of deductibles, and making sure you receive credit for any possible auto insurance discounts that may apply.

Option # 1: Settling on a Basic Plan

When it comes to auto insurance, there are a number of basic plans available to consumers. Your task is to find the basic plan that is the best fit for your situation. This begins with identifying and understanding each type of plan.

Liability coverage focuses on covering expenses related to the damages sustained by other parties involved in the accident. Depending on the provisions within the plan, this means the insurance provider honors claims for bodily injury, property damage, or a combination of the two, up to the limit amount named in the policy. Auto insurance of this type is often required as a minimum in many jurisdictions.

Uninsured Motorist Coverage comes in handy when the other party involved in an auto accident does not carry any type of liability coverage. With this type of plan, claims for repairs up to and totaling your vehicle, plus any medical costs due to injuries you sustained in the accident may be partially or completely covered.

Full coverage is one of the most common forms of auto insurance on the market today. As the name implies, this type of auto coverage includes both liability and uninsured motorist coverage, along with collusion, comprehensive and property damage provisions. Increasingly, many jurisdictions are requiring that vehicle owners have at full coverage as a minimum requirement for registration of vehicles and renewing a driver’s license.

Option #2: Deciding on Deductibles

With whatever type of auto insurance policy you choose, there will be some deductibles associated with the scope of coverage. Deductibles are simply the amount that the policyholder must pay out of pocket before the coverage extended by the provider will begin to cover the costs of a claim. The trick with deductibles is to decide how high or low you want to set those out of pocket costs so that you enjoy savings without creating a potential financial crisis for your budget.

Determine how much you can reasonably set aside to cover those deductibles. Place that amount in an interest bearing account with little to no withdrawal penalties. This will ensure that absorbing the out of pocket expense will not derail the household budget.

Build up those deductible reserves over time. When the time comes to renew the policy, talk with your agent about increasing the deductibles while keeping the same limits, based on the funds you’ve set aside. The result will be lower insurance premiums that take less of a bite out of your monthly net income.

Option # 3: Lock in Those Discounts

Many auto insurance providers offer discounts for different types of customer behaviors and circumstances that help to minimize risk to those providers. The idea is to reward customers for possessing certain attributes or traits that help to reduce the chance of being the cause of an accident and leading to the insurance provider having to pay out on a claim. Keep in mind that it is up to the customer to identify and claim any of these discounts, and make sure they are applied to the total cost of the coverage each and every term.

Good driver discounts are issued to customers who have maintained a clean driving record for a minimum number of years. Depending on the provider this will include avoiding everything from parking tickets to involvement in an accident.

Low Annual Mileage Discounts can also apply to owners when the amount of mileage added to the car over the course of the calendar or billing year is under a certain amount. The rationale is that the less time a car is on the road, the less potential exists for an accident to occur.

A safety feature discount awards car owners who drive automobiles equipped with features such as air bags for both the driver and front seat passenger areas of the vehicle, as well as safety belts and restraints that are up to the standards of the insurance provider.

Anti-theft discounts are available when the insured vehicles are equipped with alarms, GPS tracking systems, and other devices that help to reduce the potential for car theft.

Anti-lock braking or ABS discounts can save money for owners who have vehicles that include this type of enhanced braking system. This is because the anti-lock braking features will prevent the brakes from locking up during a traffic incident, reducing the potential for the car to roll and cause even more damage to the vehicles and the people involved.

Student driver discounts include some sort of deduction on the total cost of the coverage when a student has successfully completed driver’s education courses through a high school or a vocational school. A similar discount in some jurisdictions allows high school and college students who maintain a minimum grade point average to also obtain a small price break on the cost of auto insurance.

Properly evaluating all the options associated with auto insurance coverage can result in saving a great deal of money. By taking the time to understand the types of coverage available, the best ways to balance the need for lower deductibles with keeping the household budget intact in the event of an accident, and making sure that any and all possible deductibles are claimed and applied, the policyholder can maximize the benefits of the coverage while realizing the best possible savings. While the process does take time and effort, the rewards can be significant.

Everyone searching for auto insurance should use an auto insurance comparison tool to see which auto insurance fits your needs best.