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Cut Auto Insurance in Half

Auto insurance bills seem to creep upward all of the time. To some extent, the rising price of everything is just a fact of life. But as it pertains to auto insurance, there are some things you can do as a policy holder to lock down much lower rates than what you might be paying. Even without resorting to switching auto insurance companies, you can slash your rates, sometimes in half. Here are some things consumers can do to save big on their car insurance premiums. If you are looking to slash those rates in half, this is how you do it.

Look at Auto Policy Details

The first thing you will want to do is look at the specifics of your auto insurance policy. If you are looking to have a fire sale on your auto insurance and slash and burn coverage to get your rates just as low as they will go, the first thing to look at is your liability coverage. Bring it down to the bare minimum required by your home state. Drop collision and comprehensive entirely. (As an alternative if you have to keep collision and comprehensive due to a car loan or lease, raise your deductibles to $1,000 or more). Drop your uninsured motorist protection down to the minimum allowed by your state. If you live in a state where it is not required, get rid of it altogether. All of these actions together should take a significant chunk out of the cost of the policy.

But of course, there is a catch, as always. While you were slashing and burning prices, you also got rid of most of your protection. Every decision we make to save money on our auto policies must be made with an eye toward the cause and effect relationship of cost to coverage. For everything we cut, we create a potential hole in our coverage that might prove to cost us later. So while it is great to attack that policy with gusto if you absolutely need to save money, you always have to do so with the full awareness of the possible repercussions down the road.

Cut Coverage with Caution

As policy holders, we have to make choices to cut the coverage down on our auto insurance only after paying due diligence to the topic, and only with caution. For example, raising the deductibles on collision and comprehensive insurance is a very popular way to save money on those particular areas of coverage. Many drivers do it when they buy cars by using financing and find that the insurance rates they are forced to pay are more than what they can really afford. So they jack up those deductibles, and like magic, the insurance rates come way down.

But making the choice to raise your deductible has to be done with a full understanding of what it is you're really doing. Drivers think to themselves that they are just increasing the amount that they will have to pay out of pocket in a claim when they increase deductibles for collision and comprehensive. And this is totally true. But that isn't the only thing you are doing. By raising that deductible to $1,000 or even $1,500, you are also self insuring for that entire amount. In other words, for any future claims that come up, the value of the claim would have to exceed your high deductible for a filing to even make sense or be warranted at all. By significantly raising deductibles, drivers are agreeing not to file nearly as many claims, or at least to give up opportunities to file smaller ones.

Other Options to Save Money

If this scenario is fine with you, then a sharp increase in your deductibles will definitely do the job of helping slash your rates. With huge deductibles, the insurance company is so much less likely to have to work on any claim other than a total loss that its administrative costs go way down. But if rethinking that deductible increase doesn't sound so good anymore, there is another way to squirrel away some savings and make that bottom line look better. It's a little more work, of course.

To save money on your auto insurance policy without resorting to cutting back on your coverage, shop around and around for coverage. Take the time to do it right. Get started well before your policy period expiration and renewal come up. Window shop some prices online, and if something sounds promising, give it more of your attention and see what happens.

Cutting your insurance rates in half pretty well requires some drastic cuts in coverage. But for those of us who are not comfortable with that, shopping around for a cheaper carrier can save money.


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