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Save More on Collision Car Insurance

Collision car insurance is one of the three main parts of an auto insurance policy. Along with liability and comprehensive, collision insurance helps make up a strong foundation of coverage for any insured driver and auto owner. It provides steady and beneficial protection to covered policy holders. But in exchange for the protection it provides, insured drivers usually have to pay quite a premium on collision insurance for their vehicles. For this reason, it's important for most of us to try to save wherever we can to help keep our premiums as low as possible. There are some things you can do with your policy to save money on it, from adjusting the characteristics of the policy itself to changing the company you buy from. But there are other considerations an auto owner should also keep in mind as a car gets older and declines in value.

Increase Deductibles to Save Money

The first and most obvious way to save money on any auto insurance policy is to make adjustments to the coverage itself to drive down its cost. One way you could go about doing this is to lower the limits of coverage. But unlike with your liability policy, this is not really a workable solution with collision because the limits of coverage are just based on the market value of your car. So since the coverage pretty much is what it is to a large extent, your other option in this area is to adjust the deductible. The deductible is the per accident out of pocket cost the insured driver has to come up with before an insurer will pay out on a claim. A typical default deductible for a collision policy is $250.

One option you have as a covered policy holder is to have your provider raise that deductible. An increase to $500 can save you as much as ten percent or more on your collision premium. Further increases to $1000 significantly impact the premium cost of the policy. So if money is tight and you are having a hard time handling the cost of your auto insurance, a look at the deductible on this part of your plan may be in order. You can always get prices from your provider just to see what it would save you. Simply inquiring does not obligate you to go with a higher deductible.

Increasing your out of pocket cost to $500 or $1000 obviously raises the personal financial burden you will have placed upon you as a driver in the event of an accident claim. But another less obvious effect it has is a significant limitation on your ability to file small claims at all. Even if the damage from an accident is slightly higher than your new deductible, in many cases you might just opt to pay the costs out of pocket to save yourself from a possible hike in your premium. The higher your deductible is, the more you will be limited on smaller claims, and the more likely you'll be to experience significant out of pocket fees. So take the cost savings on your auto policy in consideration, but also think about the corresponding increase in personal financial responsibility you'll be looking at following an accident.

Shop Around for Lower Premiums

Aside from making adjustments to the terms of your car insurance protection, you can also think about the provider you're working with as a potential source of savings. When renewal time approaches, don't be afraid to shop around for lower car insurance prices. Just gathering a few quotes in no way obligates you to switch companies. Your current car insurance provider will likely send you a renewal notice including financial terms for the new covered period. Just compare these terms with what you can find elsewhere and see whether you're getting a good deal. If you are, you can rest easy and sign on for renewal. If not, you have saved yourself some money and you can get with a cheaper car insurance company.

When to Consider Dropping Collision

Collision auto insurance is tremendously valuable for newer cars or vehicles that are worth a lot of money. But as your car ages and depreciates, collision car insurance loses its value. The cost of this car insurance coverage is unlikely to go down as quickly as the value of the car, so in essence you are not getting as much dollar for dollar as the vehicle gets older.

At some point it will be time to drop collision entirely from your auto insurance plan. Many experts recommend doing so when the value of the insured vehicle is less than ten times the premium for collision. It's an individual decision, but you should weigh cost versus coverage when you decide.


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