How can I Save Money on Auto Insurance?
At Encharter our goal is to make sure you have the protection you need at a price you can afford. I often get the question, “How can I save money on my auto insurance?” One of the first places I look is at deductibles.
Your auto insurance policy has two main types of coverage. Liability coverage (insurance against damage you cause to someone’s car or to someone’s person. An example would be hitting a pedestrian or bicyclist. For this coverage I always recommend as high a limit as you can afford, but never under $100,000. This is the area where you have the greatest financial risk.
The second area of coverage is damage to your vehicle – in the industry we call this physical damage insurance – why we use such archaic terms, I will never know. Often, this coverage is required by the company financing your vehicle. The insurance you buy is broken into two parts again, for reasons unclear to me – perhaps just to make it confusing.
Collision Coverage – Damage due to you hitting something or something hitting you. Example, you run into a telephone pole and you wreck your car.
Comprehensive Coverage – A catch all for other stuff that happens to your car. Like a tree falling on it, someone vandalizing your car or the car catching on fire.
In both cases, I always recommend deductibles as high as you can afford – here is why. In the event of a loss, you submit your claim to the insurance company and they pay it. What happens next they raise your insurance costs and this increased price doesn’t last for one or two years, but often three or more. So what is the best course of action if you have a small accident Answer, fix it yourself and don’t report the claim. If you are going to do this, then you might as well take the credit the insurance company gives you for taking a higher deductible.
How high a deductible, you ask – well that depends. It differs for everyone based upon your financial condition. For me, I carry $2,500. In the event of an accident –and I am a good driver and don’t have many accidents – I can come up with the$1,000 to repair the car. If $2,500 would be a financial killer for you, then think about $1,000, $500 or $250.
Lastly, many of the insurance companies have come up with some terrific loyalty credits – like accident forgiveness they will forgive an accident and not raise your rates if you have been a good customer for several years or deductible buy downs your deductible goes down for each loss free year you have. Despite these products, I still recommend you save money and go with a high deductible.
At the end of the day, there’s no replacement for driving safe. That is the best way to save money in the long run. Slow down, leave space,keep alert. If you are a safe driver –even if you have had an accident or two – look us up on line @ archive.encharter.com for a better way to shop,buy and save on auto insurance.
It’s all about protecting you!
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