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When To Assume Higher Risk With Auto Insurance
One of the easiest ways to lower your auto insurance premium is to assume higher risk. To do so, you have two options:
- Taking on higher deductibles.
- Lowering or dropping your full car insurance coverage.
Adjust Your Full Car Insurance Coverage
If you have a vehicle that's at least 10 years old and has lost its value, consider adjusting your full car insurance coverage. One way to do this is to drop collision and comprehensive protection. Otherwise, you're probably paying for more insurance than you need.
For instance, if your vehicle's current value is listed at $1,750 and you have a collision policy with a $3,500 limit, you're paying for far too much insurance protection. You could easily save yourself money by dropping the entire policy and assuming all of the risk of the vehicle. This is especially wise if you don't have long-term plans for the vehicle and limit its use to running local errands.
For help in determining your car's value, consult either the National Automobile Dealers Association (NADA) or Kelley Blue Book.
Assume Higher Risk With Higher Deductibles
Assuming the risk of a higher deductible is a fast and easy way to lower your insurance premiums. The difference between say a $250 deductible and a $1,500 deductible could be as much as several hundred dollars. The actual difference, of course, depends on your provider and current vehicle situation.
But before assuming the financial risk of a higher deductible for your auto insurance policy, ask yourself the following:
- How much money do I have in my savings account? If your account balance stands at $637 it would not make financial sense to carry a $1,000 deductible. Otherwise, if you're involved in an accident, you won't have enough money to cover your deductible. And until you pay the deductible, your insurance provider won't kick in a single dollar.
- Am I prone to car accidents? If you answer no, you should give strong consideration to a higher deductible.
- How long is my daily work commute? If you work from home or take public transportation, assuming more risk may be a wise decision.
Additional Car Insurance Information
Visit our Insurance Center to learn more about full coverage auto insurance policies, your state's liability insurance requirements, and ways to score discounts for lower auto insurance premiums.
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Other Topics in This Section
- What To Do If Your Auto Insurance Policy Lapses
Tips On Handling An Auto Insurance Lapse And What To Do If You Face Car Insurance Cancellation. Immediately Reinstate Insurance To Avoid Further Penalties.
- Who Needs High Auto Insurance Deductibles
How High Auto Insurance Deductibles Suit Certain Drivers. Get Info On Circumstances That Call For Higher Car Insurance Deductibles. Save Money With An Auto Insurance Policy That Suits Your Needs.
- Who Needs Low Auto Insurance Deductibles
How Low Auto Insurance Deductibles Suit Certain Drivers. Learn More On When Lower Car Insurance Deductibles Are A Good Idea. Find An Auto Insurance Policy That Suits Your Needs.
- Benefits Of Increasing Car Insurance Deductibles
Learn More On Higher Deductible Auto Insurance. Look Online For The Benefits Of Increasing Car Insurance Deductibles. Find Out Why It Can Save You Money On Insurance Rates.
- Reasons To Change Auto Insurance Companies
Top Reasons To Change Auto Insurance Companies. Switch Car Insurance Providers When An Insurance Policy Doesn't Meet Your Needs Or Budget. Insist On Quality Customer Service And Products.
- How To Review Your Current Auto Insurance Policy
Tips On How To Review Your Auto Insurance Policy. Car Insurance Can Be Tricky. Be Sure You Understand Your Auto Insurance Policy Coverage Before Making Car Insurance Claims.
- Penalties For Making A Late Auto Insurance Payment
Info On Penalties For Paying Your Auto Insurance Premium Late. Maintain Car Insurance At All Times. Stay On Top Of Insurance Policy Payments To Avoid Late Fees And Nonrenewal.
- How To Combine Coverage On Homeowners And Auto Insurance
Steps On Combining Homeowners Insurance And Auto Insurance. Learn More On The Benefits And Insurance Discounts Associated With Combined Coverage.
- What To Do If An Auto Insurance Company Denies Coverage
How To Handle Being Denied Auto Insurance Coverage. Learn What To Do If Car Insurance Companies Won't Cover You. You Might Have To Pay A High Insurance Premium.
- When To Compare Auto Insurance Quotes
Learn When It's A Good Time To Compare Auto Insurance Quotes. Easily Shop Online For Car Insurance 24/7. Compare Quotes Often To Find Competitive Insurance Rates.
- How To Get Car Insurance Coverage With A Suspended License
Steps On Getting Car Insurance Coverage With A Suspended Drivers License. Options For A Suspended License Could Include SR 22. Find More On Auto Insurance Online.
- How To Add A Car To Your Auto Insurance Policy
Info On Adding Another Car To Your Auto Insurance Policy. Combining Car Insurance Coverage Can Save You Money. Learn How To Lower Your Insurance Premium By Bundling Insurance Policies.
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