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Car Insurance Savings for Twentysomethings

Car insurance savings for twentysomethings is an issue of some importance for many of us in that age category. If you are young and do not have much in the way of worldly possessions as of yet, don't let an insurer pressure you into buying more coverage than what you can really afford. But at the same time, even in your economic state you should never base your insurance decisions solely on cost, either.

Assets Can Influence Liability Decisions

A good example rests in the choices we make for our liability auto insurance. If you are in a situation where carrying that $300,000 policy is just too much financially, don't waste your time worrying about it. For one thing, most civil judgments fall far below that threshold anyway. If you are just getting out on your own for the first time, you might not own all that much. But even so, judgments could be handed down in these cases that include wage garnishments and other means to recover losses when the negligent party does not have either the assets or insurance protection to satisfy the terms of the court's decision. So there is a potential for you to be paying off a judgment for many years if you get into the unfortunate circumstance of facing a case like this with inadequate liability insurance.

On the other hand, if you do have substantial assets to your name, you have every reason to evaluate the situation with some care and caution. Minimum liability limits set forth by your state will probably be inadequate to protect you if you are married, have any kids or have been able to set any appreciable chunk of money aside over time. As a general rule, low liability limits make all your assets vulnerable if you cause a major accident or are found liable for one. Having ample assets readily available makes the temptation for lawyers to go after you all the more enticing. Once the limits of your policy have been exhausted, the victim can come after you for your personal assets or wage garnishment for any additional damages the courts are willing to award in these cases. So, take extreme care in selecting the limits of your policy. A good rule of thumb: buy as much auto liability insurance as you can afford. This coverage may be more important than collision and comprehensive even if you own a nice car.

Saving Money on Twentysomethings Premiums

Drivers under the age of 25 pay higher car insurance premiums than those of any other age demographic, including elderly motorists. Younger drivers cause more accidents and cost insurers more money in claims each year on average than any other group of drivers. They are the riskiest drivers on the road to insure. So if you fit into this age category, you are pretty well assured of paying higher rates for your insurance. But that doesn't mean you should just sit back and wait to turn 25 or 30. There are some things you can do to save money as a young driver on your auto insurance.

To offset these higher auto insurance premiums, you have the option of raising the deductibles for your comprehensive and collision insurance or trying to qualify for one or more of the many discounts there are available from the various auto insurers across the country.

For example, you could focus on reducing the miles you drive in your car in order to not only save on gas, but also to qualify for a low mileage policy and save money on your premium. Or you could enroll in a certified defensive driving course if your insurer offers discounts for passing such a course (many do). Dropping collision and comprehensive altogether may be a smart option if your car is getting older and not worth as much as it once was. These areas of coverage are typically tied to the cash value of the insured vehicle, so they lose their value over time just as your car does.

Consider the Whole Financial Picture

To save money, think about other insurance protection you have that might make certain parts of your auto insurance plan redundant and thus unnecessary. Don't pay for coverage you don't need. It's expensive enough paying for coverage you actually do need. If you have good health insurance, certain no fault states will allow you to waive personal injury protection (PIP), which is otherwise required in these states. Getting ridding of coverage you don't need can save you money, and PIP coverage is just one example of this.

Take caution when choosing what to cut. Car insurance savings for twentysomethings is important, but not at the expense of protection you actually need. Do your homework and know the difference.


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