clock August 1, 2012 comments No Comments flowchart Automobile InsuranceOur Blog tag Saving Money

There are better ways to saving money on your auto insurance than reducing coverage. Here are the top five tips to decreasing your RI car insurance payment without decreasing your policy limits or increasing deductibles.

1.     Buy In Advance and Pick the Right Payment Plan

Many people wait until the last minute to start looking for a new car insurance policy. You receive your renewal bill, set it aside, and then 5 days before its due you realize you should shop around for cheaper insurance. That’s a mistake. Most insurance companies give advance shopping discounts for purchasing a policy at least 10 days prior to the day you need the policy to begin. Plan ahead and shop ahead, you’ll save up to 10% on your policy. In addition to buying in advance, you may want to consider paying in advance. Take advantage of pay in full discounts if you can. If paying in full is not an option for you, the next cheapest alternative is to pick a monthly payment plan that is automatically deducted from your checking account. The EFT (electronic funds transfer) plans usually include policy discounts and reduced or waived billing fees.

2.    Take Advantage of Bundling Discounts

You probably have your TV, internet, and phone service bundled, why not do the same with your home, auto, motorcycle, and boat insurance?  The more policies you have with the same company, the bigger discount you will receive.  If you don’t own a home, don’t be too quick to skip this tip.  You should consider renters insurance.  Many times you can purchase a package policy that includes car and renters insurance for less than just car insurance alone.  If the average renters insurance is $150 per year, the average bundle discount is 15% and you are paying more than $1000 per year for car insurance, you do the math.  It’s cheaper to buy both!  Save a bundle when you bundle!

3.    Become a Better Driver

It’s no secret that better drivers pay less for insurance but you may not realize there are tools available to help you become a better driver.  Many insurance companies and national safety organizations offer Accident Prevention Courses.  These courses range from a quick online class to DVD training.  Ask your agent if there is a course your insurance company endorses.  If you have a teen driver in your home, enroll them in a Driver Training program. These programs give them valuable behind the wheel experience and substantial insurance savings.  The money you save on your insurance over the years will more than cover the cost of the program, not to mention the life-long benefit of teaching your teen safe driving skills.

4.     Choose the Right Car

The car that draws less attention generally costs less to insure.  Stay away from high performance vehicles, high end luxury vehicles, convertibles, or extremely customized vehicles.  Sedans are usually cheaper to insure than coupes.  Small pickups are better on your wallet than oversized 8 cylinder trucks.  Used vehicles that are a few years old are less to insure than that brand new car you have your eye on, and do not overlook the safety characteristics of a vehicle.  Vehicles with safety features such as airbags, anti-lock breaks, automatic seatbelts, and burglar alarms will also cut costs on your insurance.

5.    Less Coverage Is Not Necessarily Less Expensive

Rhode Island’s state minimum insurance requirement is bodily injury liability limits of $25,000 per person, $50,000 per accident and property damage liability limits of $25,000. Buying the state minimum insurance is not necessarily the least expensive (or the most desirable) way to go.  If you only have the minimum insurance, you may end up in the “risk pool” or in a higher risk pricing plan.  Many insurance companies offer discounts for individuals that choose higher liability limits.  Also, it’s important to make sure you have continuous insurance.  Try not to ever let your policy lapse or cancel.   You may think you are saving money by not having insurance for a period of time (whether its because you’re on vacation, out of the country, temporarily have your vehicle off the road, or you just forgot to pay this month).  However, a lapse in insurance usually means paying more down the road. Don’t fool yourself. Be sure to maintain continuous insurance at all times to avoid costly penalties on your insurance.

Insurance is about protecting yourself against unforeseen accidents.  If an accident happens, you want to know that you are financially protected again costly injuries, lawsuits, or expensive car damage.  Do not make the mistake of cutting your insurance to save money.  Of course, sometimes you do it out of necessity, but reducing coverage should be the last resort.  Look to these money saving tips first, before you decide to reduce limits or increase deductibles!