1.     Annual Mileage –

Most people don’t take the time to figure out how many miles they actually drive in a year.

It’s important to know as part of the cost of your insurance is based on that number.  Higher miles equals a higher cost of insurance as the insurance companies figure there’s a better chance of you getting into an accident.

You can make sure your insurance premiums are as low and accurate as possible by ensuring your annual mileage estimate is correct.

2.     Group Discounts –

Most insurance companies offer better rates to people that belong to certain groups.  Be sure you’re getting those discounts on your policy if you qualify.

Here is a list of some of the most common discounts:

• Full-time student with a “B” average or better
• Anyone with a Bachelors degree in Science, Engineering or Computers
• Educators with a Teaching Degree
• Cars with alarm systems (especially LoJack)
• Good Driver discount (1 point or less on your driving record and no license suspensions)
• Multi-Car discount
• Having another driver with a better driving record than you also on your policy
• Multiple-Policy Discount – If you also purchase insurance for your home or apartment

3.     Coverage Details –

As an insurance agent, I strive to make sure people have the best coverage and protection for the best price. 

First, let me quickly explain how the different types of insurance coverage apply:

Liability-

This covers you, the driver, if you cause an accident and injure other people and/or cause damage to their car.  Your insurance company will pay up to the limits of your coverage. 

As of May, 2009, California requires you to carry limits of at least 15/30/5.  That means your insurance company would pay up to $15,000 per person injured, $30,000 total if multiple people are hurt and $5,000 to help pay for property damage (typically, the other person’s car).

Uninsured Motorist Bodily Injury –

This covers you and your passenger’s injuries if an uninsured driver hits you.  This is not required by law but it’s generally quite inexpensive and a good idea to have. 

The Uninsured Motorist Bodily Injury limits are usually the same limits as your Liability limits.

Comprehensive Deductible –

The Comprehensive Deductible is the dollar amount you agree to pay before the insurance company steps in to take care of the rest of the cost to repair or replace your car in the event it is stolen, vandalized, a tree falls on it… almost any damage that you are not at fault for.

Most people incorrectly believe their insurance rates will go up if the insurance company pays for an incident involving your Comprehensive coverage.  Your insurance will not increase as you were not a negligent driver.  It wouldn’t be fair to penalize you for something you weren’t at fault for (e.g. your car getting stolen or someone breaking your window).

Collision Deductible –

The Collision Deductible is the dollar amount you agree to pay before the insurance company steps in to take care of the rest of the cost to repair or replace your car in the event you cause an accident.

You causing an accident will, however, increase your insurance rates.

Now, that that’s out of the way…

Increasing your Liability Coverage typically does not raise the cost of your insurance dramatically.  Obviously, the exact dollar amounts are different with each person and each company but to increase from 15/30/5 to 25/50/25 may only be a $10 or $20 increase for the entire policy. 

You are not required to have higher limits but you may want to consider it.  After all, if you cause an accident, medical bills can get expensive in a hurry.  The cost to repair or replace a vehicle isn’t cheap either.  $5,000 may not go very far if you run into an expensive car.

The scary thing about not having enough liability coverage is YOU are responsible once the limits on your policy are reached.  The other party that’s injured may sue you to try to get the remainder of their medical bills paid for and/or their car taken care of.

Be sure to ask about the price difference to increase your Liability coverage.  

Uninsured Motorist Bodily Injury covers you or your passenger’s injuries (up to your selected limits) if an uninsured driver hits you.  This may be the least expensive portion of your insurance policy. 

Knowing how many uninsured drivers are on the road can be difficult to determine.  We certainly know that it’s more than we’d like.

I’m sure we’ve all known someone who forgot to pay their insurance and their coverage lapsed or someone who simply didn’t have the money to pay their insurance bill that month.  If that person got into accident while their insurance lapsed, even if only for 10 minutes, they would not have any coverage. 

This also means if that person hit you during that time, they would not have any coverage to pay for your injuries.  You could try to sue them to try to get your bills taken care of but that is an expensive, lengthy headache we’d all rather avoid… and it is avoidable if you simply carry Uninsured Motorist Bodily Injury coverage.

A $500 Comprehensive Deductible seems to be what most people choose.  Please note that a new windshield, window, tail light cover, scratch repair, etc. often costs less than $500… which means, you will have to pay for it yourself. 

Lowering your Comprehensive Deductible is worth looking into.  Your insurance will increase slightly (as now the insurance company would have to pay a little more if something happened) but that increase is generally small.  I often see people go from a $500 deductible to a $250 deductible and it only adds $3-$5 more for their entire policy.

Lowering your Collision Deductible is not quite as cheap as lowering your Comprehensive Deductible.  Ultimately, it has a similar effect in that you pay less out of pocket (in the event you cause an accident) but the increase in premium is a bit more noticeable.  Often times it adds $50-$100 or more to the policy per car.

Arming yourself with the knowledge to ensure you have the best auto insurance coverage at the best price is a sign of a truly responsible driver.  That knowledge is worthless if you do not apply it, however. 

Visit the Auto Insurance page to get free, immediate online quotes today.