How to Lower Your Auto Insurance Premiums

by Bailey Harris

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There may be no greater example of personal freedom than to be able to travel when and where you want to, and owning a car allows you to do that. However, in order to do so in the United States you need to carry auto insurance if you intend to drive on public streets–and if you don’t own the car outright, you must have full coverage insurance in most states, which can be costly. Following are a few tips on how to lower your auto insurance premiums.

Areas of Coverage

An auto insurance policy should shield you in the event something happens regarding your car. There are a few basic areas of coverage that your policy is designed to provide protection for. Among them are liability, collision, and comprehensive. With adequate coverage in each of these three categories, you should be amply protected against damage, theft, or someone getting hurt due to your negligence. Another area where insurance can come in handy is when there is a significant difference between what you owe on the vehicle and what it’s presently worth–commonly known as a gap in coverage.

Liability Coverage

By definition, liability coverage protects you in the event someone is hurt or killed as a result of your involvement in an accident. It will also cover the damage to another vehicle, or other property, if you’re involved in an accident. In each of these cases, your liability coverage will kick in if you’re deemed to be at fault for the accident. Carrying adequate liability insurance is necessary, first of all because it’s required by law if you’re driving on public roads, and second, and perhaps more importantly, because it’s the smart thing to do. If you lose control of your car and hit a pedestrian, your liability insurance will cover their hospital bills, and if they sue, it will help pay for a lawyer and provide funds for a settlement. Without adequate liability insurance in place an accident of this sort could bankrupt you, and cause financial strife for years to come.

Collision Coverage

Carrying collision insurance isn’t mandatory, but it is recommended that your auto insurance policy contains collision coverage, even if you have to carry a high deductible to keep costs down. If you’re involved in an accident where you’re at fault, collision coverage will pay for the damage to your car, minus the deductibles. Without collision coverage you would most likely have to pay for repairs out of your own pocket.

Comprehensive Coverage

In many cases collision coverage is confused with comprehensive. While collision insurance will pay for damage to your vehicle as the result of an accident that is your fault, comprehensive coverage will pay for repairs to the vehicle, whether it’s your fault or not, for damages caused by something other than an accident or collision. An example might be if a large tree limb falls on your car while it’s parked in the driveway, or a stone chips the windshield while you’re driving. It will also cover the loss of your vehicle if it’s stolen.

Gap Insurance

In most cases, when people buy a new car there is a ‘gap’ between what they owe and how much the car is actually worth for the first few months they’re driving the car. This is the result of the vehicle’s decrease in actual value the moment you leave the car dealership–unless you’ve put a healthy down payment on the car, you more than likely owe more than it’s worth as soon as you leave the parking lot. In order to prevent any out-of-pocket expense on your part, and to protect the lender, as well, having gap insurance coverage will make up for the difference if you’re involved in an accident or the car is stolen.

Shop for the Best Price

Finding adequate insurance coverage for your vehicle is no problem. However, getting the right amount of coverage at a reasonable rate could entail some time and leg work on your part. Shopping for the best price is the single best method of making sure you’re covered without breaking the bank. Go online and get some cheap insurance quotes from insurance companies doing business over the Internet. Use these prices for comparison when you begin calling brick and mortar insurance companies. Tell the agent you talk to about the quotes you’ve received from online companies and ask if they can meet or beat the price. Also, ask them for any discounts that may be available, and don’t forget to ask how much money can be saved by taking a higher deductible.

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