Cut Your Car Insurance Costs | brokeGIRLrich
I don’t know about you guys, but my car insurance payment is one of the biggest expenses I have each year – New Jersey isn’t exactly the cheapest place to get insurance either. I’m pretty lucky though, since I actually understand my policy pretty well and all the mumbo jumbo that it’s made out of, since I spent a brief stint as a Customer Service Rep for Nationwide in grad school.
Did you know that every one of those folks on the other side of the phone is a licensed insurance agent? We had to be to be able to make any changes to a policy. And I learned a lot real quick (like no, you can’t insurance a parade float or a motorized wheelchair on an auto insurance policy – true stories).
Paying your monthly car insurance bill can be a painful process, and costs continue to skyrocket. While according to the DMV women pay significantly less in insurance than men over a lifetime, it can still be a substantial burden. Many states require some insurance, but you may be throwing away your cash on unneeded benefits. While it might seem a little hopeless, there are a number of ways that you can cut back on your costs.
Understand How Insurance Is Priced
Car insurance is typically broken down into six different types of coverage, which are priced individually. Therefore, your insurance bill can be broken down into six different costs: collision coverage (repairs to your vehicle), comprehensive (vehicle repairs and damages outside of collision), property damage (repair to other vehicles), bodily injury liability (injury costs incurred by others in a crash), personal injury protection (injuries to you and other passengers), and uninsured or underinsured coverage (protects you in an accident with someone who does not have the required insurance). Each of these pieces contributes to your overall bill separately.
Determine Your Specific Needs
Assessing your individual situation can help you identify where you can cut back. You will want to ensure that you have minimum liability because some major accidents may leave you open to substantial lawsuits.
You want to make sure that you are financially protected. However, you can save cash on collision and comprehensive plans. If you drive an older car that has been paid off, you will not need and these plans and ultimately may pay more in fees than you would possibly get reimbursed for. If your annual payments are 10% or less of the blue book value of your car then there is no need for these policies. However, if you do not have the cash to replace a newer car then you will want to make sure you can get reimbursed for repairs or replacement.
Highlight Your Clean Driving Record
Insurance companies base rates on your risk levels. If you are more likely to get into an accident, they will charge you more. If you are less likely, they will charge you less. Therefore, the more quickly you can clean up your record the better. If you already have an optimal driving history then highlight this and keep it up. Some policies will even continually reward you for safe driving. These reimbursements and savings can certainly add up.
Investigate Discounts
Many agents will not directly advertise many of their discounts to new customers. However, if you ask, you may be able to discover hidden savings. Many companies will provide discounts if you bundle your policies. Therefore, you could not only save money on your car insurance but also home or renter’s policies. Additionally, certain features in your car could help reduce rates including anti-lock breaks. You may also be able to save money if you are in a particular profession including education or engineering, and military members and family can receive significant savings. It doesn’t hurt to ask, and you could be looking at some important adjustments. To begin asking these questions, click here.
Insurance doesn’t have to be a debilitating expense, and there are a variety of ways that you can begin to cut back growing premiums. A little bit of time and assessment can make an important difference.
**This post is linked up over at Frugal Friday on Aspired Living. Come party with us and share your best frugal posts of the week!*
Our insurance is very affordable. I know many who pay 3 or 4 times more than we do when they don’t need to. It’s crazy!
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I lucked out and got pretty good insurance through NJ Manufacturers because my dad is a contractor. But NJ still has ridiculously high premiums.
Great tip to investigate discounts. Many times, companies will have discounts available and all you need to do is ask for them. Thanks for the great tips.
Definitely! It never hurts to ask.
I just saved $60/year on mine by switching from paper bills to electronic bills/payment drafting.
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That’s awesome. Sometimes they really do nickel and dime you with the fees and when you call to ask about it, you can find ways to get those savings back.
I can vouch for the high NJ auto insurance premiums! I’ve found that if you shop around regularly (when your policy is up for renewal), you can save a lot. Yes it takes a little extra time and it’s frustrating to switch providers, but many insurance companies have started using price optimization to determine who’s likely to remain loyal, and gradually hike their rates up.
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I’ve also found that it is important to shop your coverage every couple of years to make sure you are still getting a good deal. Just be careful to make sure you aren’t comparing apples to oranges. Thanks for linking up to Frugal Friday!
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We bought a Lancer EVOLUTION this summer and it doubled our car insurance payments. Ugh! So it didn’t used to be much of a significant expense… both of our cars used to cost about $100/month with full coverage insurance. And now we pay over $200/month. It’s crazy how much high end sports cars cost to insure!! We were going to petition our clean driving record to try and lower the costs, until my husband got a speeding ticket for the first time in 5 years. Insert a sad trombone sound effect here…
Ugh, that stinks!
Like you, I have a huge car insurance payment. It’s a huge expense that gives me a lot of stress. I’m going to take your advice and ask my insurance agent for discounts. I trust my agent, and I know that he’ll help me out. Thanks for the ideas!
Thanks for explaining how car insurance is broken down. Understanding what kind of coverage types there are, along with what I actually need, will help me immensely in negotiating lower costs. I will be calling my car insurance company and going over these points as soon as possible!
I agree that its important to determine the type of collision coverage that you would need. Growing up, my family benefitted from collision coverage. Looking back, I don’t know how much we otherwise would have had to fork out, but it probably would have been a lot.
That’s great that you understand your insurance. I have to admit that I’m still a bit fuzzy on the details of my coverage. Maybe I should talk to them about my safe driving record. I’ve never been in an accident, so I should be getting a discount for that. It’s nice to know that it counts for something.
I would say that shopping around saved us the most money. We called multiple services for quotes and asked about any discounts available. It’s worth the time to make those calls. Even if it only saves you $10 per month, that’s $120 per year!
I’m new to the insurance world and am struggling to find a car insurance provider that I can afford. There is just so much that goes into this process of finding a good provider and its hard for someone like me who has no idea what they are doing to find what they are looking for. This helped though, and I feel much better about finding one now.
These are some really great tips for anyone looking to save on auto insurance. It can be difficult to sift through all options and find the company that’s right . these are great tips for finding someone who will watch our back on the road.
I like the paragraph about understanding how car insurance is priced. I didn’t know that my bill was divided into six different costs. I’m pretty sure that my comprehensive coverage is what makes my bill so expensive. I can work on cutting down in that area. Thanks!
Always ensure your mileage is correct & declare if you don’t travel far, as this could lower costs. If you work as a Volunteer for Medical Associations/Police or RNLI you should add it onto your Insurance. As a single parent with a son who has a long term Medical Condition I opt for full Breakdown to be added on Insurance,but this can vary so you need to have a look round first & see if your Insurance Company can get a better deal for you.
I didn’t know that there were so many parts to auto insurance! However, knowing that the costs of the different parts add up makes it easier to decide where you can cut back and where you can’t. For instance, like you said, collision protection isn’t always necessary if your car is old, since the cost of insurance may end being more than the car is worth. Thanks for the article!
These are all good tips and really important things to put into consideration. Car insurance can certainly get costly, so it’s important to take measures in order to find the most affordable and the best option. Nice job! Thanks so much for sharing this advice!
These are all good tips and really important things to put into consideration. Car insurance can certainly get costly, so it’s important to take measures in order to find the most affordable and the best option. Nice job! Thank you so much for sharing this advice!
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