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It's 2010 and in today's economy one should be financially savvy. Oftentimes, people who are tight on their budgets look to save money on the food, entertainment, and dining categories. The last place that people normally look is saving money with their insurance providers. Here are some tips to save more money on your car insurance in 2010.
Car insurance premiums vary significantly, and many factors to into determining how much your coverage will set you back each month. For many of us, the cost of insuring our vehicles is one of our most expensive bills past housing and the car payment itself. Some of the factors that are used to determine your insurance premium are your driving record, the type of car you drive, the area you reside in, how far you drive to work each day, and even your credit score. Obviously, if you drive a sports care the insurance company assumes you are a higher risk than the mom who drives the minivan full of girl scouts. People that live in the city have much more opportunities for fender benders than those that live in tiny towns with few cars on the road. But aside from trading in your luxury car for a beater, there are some things you can do to save money on your insurance.
First thing first, you need to look at your current policy and see if you have what you really need while looking for opportunities to scale back. Many of us set up our insurance policies when we first purchase our car and never give it a second thought. What you need to pay as you drive your car off the lot and what you need to pay when your car is ten years old are very different amounts.
If your car loan is paid off, do a quick internet search to see what the blue book value is on your car. When you do so, appraise it honestly. Do not claim that your car is in "excellent" condition if it has rust spots or dings. The amount your car is worth at book value, not in what you paid for it, is an important number. In the event that you are in an accident that is your fault, your insurance will only cover up to the dollar value of the car. With this in mind, it makes perfect sense to insure a new car that is worth $20,000, but little sense to cover that same car when its ten or fifteen years old and the book value is only $2,000. Consider the odds of actually having an accident. Say you go five years of paying $600 a year for that collision coverage. Well, your car is only worth $2,000 and you've paid $3,000 for the coverage. If the math does not make sense, you can probably safely drop back to liability only insurance, which will likely cut your bill in half, if not more.
Whenever you make an insurance claim, your record reflects that claim. A claim will cause your insurance premium to rise. So it generally does not make much sense to report any damages under the amount of $1,000. With this in mind, you can often significantly lower your premium by raising your deductible. Make sure that you do not set your deductible higher than you could afford to pay in the event of an accident however, or you could find yourself without transportation if you do get in an accident.
These are basic starting points for saving on your premiums, but are the ones with the biggest impact to your monthly savings.
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