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Should I Cut Back on My Car Insurance to Save Money?

Not going to the movies, avoiding the candy and chocolate aisle and walking by the "new arrival" department at your favorite clothing store are all just a few ways of saving money each month. More and more people are trying to figure out what they can do to limit their spending and save instead. You may be finding ways to save money here and there and may consider cutting your car insurance options, but that may not be the best way to save money.

Cutting back on luxuries is certainly a way to go and consumers are doing everything possible from limiting their cable television to telecommuting for work. The economy's fickleness makes it difficult for Americans to figure out exactly what is going to happen next. Avoiding unnecessary expenses is certainly a good way to stay ahead, but cutting your car insurance may make you even more likely to have an unnecessary expense.

Losing Coverage Costs Money

Law in most states requires having auto insurance, even if it is just general liability coverage. Your car insurance policy will help you cover repairs, medical expenses, loss of wages and damage caused by the accident so you do not have to pay out of pocket. When you do not have the car coverage you need, then you are solely responsible for the damages that result from causing a car accident. You also will face negative consequences from the state.

Drivers caught operating a vehicle without the appropriate amount of insurance can face serious penalties and fines including having their license revoked. You do not have to choose the most expensive coverage options to avoid these penalties. The cheapest auto insurance options are certainly cheaper than paying multiple citations.

General liability only covers damages that you caused. Full coverage will apply to all damages, even those that you did not cause. What kind of coverage you need is dependent on your driving lifestyle, no-fault and tort systems, and the worth of your car. If the vehicle is new then of course you may require additional coverage, but if the car is older than 10 years then you may want to stick with general liability.

When you do not have the necessary coverage and you are involved in a car accident then you will have to personally pay for the damages. That means if you are injured in an accident or you injure someone else then you are legally responsible for covering the medical bills. By not having auto insurance, you could open yourself up to being sued by the other driver and/or passengers if you are unable to meet that financial obligation.

The same goes with repairs to your car. A car insurance policy will help you repair your vehicle quickly so you can get back on the road and stop taking the bus. When you have to pay out of pocket you are not saving money and changing your car insurance policy was done in order for you to do that.

You want a solid coverage plan that will cover your repairs, even if it is a basic collision policy. This does not mean you have to get the most extended coverage that will even cover your pets if they are injured during the accident. Choosing the coverage plan that works with your driving needs will help you find the plan that fits your financial needs. Just as you want to live within your means, you should drive within your means. Car insurance helps you do this.

Instead of skimping on coverage, you can find an insurance company that offers discounts that will make your premium rate lower without having to sacrifice coverage.

Types of Discounts to Help You Save Every Month

Drivers needing to clean up their driving record can take a defensive driving course to help them remove points off their license. Every citation you receive or accident you are involved in results in points being placed against your license, which insurance companies see as a risk. The higher the risk they see you as the higher your premium rate will be. Helping remove that risk will help you decrease your premium without having to alter your coverage.

Teenagers face some of the highest premium rates. Parents getting ready to add their soon-to-be driver to their policy need to look into finding discount programs to take advantage of to help lower their monthly bills. Every driver must be covered, so not adding a driver to a policy will only create more financial stress than relieve it.

Some insurance companies allow a teenage driving to take a driver's education course, limit the amount of passengers in his or her vehicle and keep their nighttime driving to a minimum. Teenagers can also receive a break on their car insurance by keeping their grades up in school. A good grades discount can be extended when your teen goes to college as well.

Not having sufficient driving experience can lead to higher premium rates. That is why more companies are offering discounts to senior citizens as they are continuing to drive, but also continuing to be safe on the road. The American Association of Retired Persons (AARP) has a list of insurance companies that will offer you a discount because of your age, instead of penalizing you.

Increasing your deductible will help you save money because you can lower your premium rate. This will not affect your coverage whatsoever, it will just mean you pay a little more until your insurance policy takes over and handles the expenses.

Choosing a Company that Fits Your Situation

Your car insurance premium is based on more than what coverage options you choose. You could have the most auto coverage possible, be it collision, comprehensive and uninsured/underinsured motorist protection or have the bare minimum general liability coverage such as bodily injury and property damage and still pay the same thing. A driver's age, gender, type of car, credit history, marital status and of course driving record are just a few things that an insurance company looks at when they are determining your premium rate.

The best ways to save is by learning how your insurance company determines their rates and see if your criterion is a good match. For example, if your credit history is shaky then you may want to find a company that does not rely so heavily on credit scores. Most drivers are not aware that having a bad credit score can cause them to pay almost double, what a driver with a similar driving record and better credit score pays.

Once you find a company that you want to give your business to, you may consider combining your insurance policies. Having multiple insurance policies (i.e. homeowners, medical, and life) with one company may result in a lower premium rate for your auto insurance. It will also lower the premium rates of your other insurance policies, which means you will save more money.

The bottom line is there are plenty of ways to save money every month on your car insurance costs without having to drive around without the coverage you need.

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