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الثلاثاء، 10 أبريل 2018

Are You Covered? Let’s Figure Out Car Insurance — And Cut Costs


Car insurance is costly, necessary, legally required in most states and, let’s be honest, responsible for some of the best TV ads in the last 20 years. But most of all, car insurance can be downright confusing unless you do your homework.

As a burnt-out college student handling all of his bills on his own, I made some rookie mistakes with my auto insurance, like opting for a $1,000 deductible on a Toyota Yaris that couldn’t have been worth more than $1,500. At that point, coverage beyond my state’s minimum requirements wasn’t even worth it.

In the time since — and because I spent five years writing in the automotive industry and needed to glean some kind of knowledge or risk being shamed by friends and family — I have learned the ins and outs of insurance coverage to reduce my monthly premiums.

Breaking Down Car Insurance

Your car insurance likely includes a number of components. The easiest way to think about your coverage is in four sections: liability coverage, vehicle coverage, medical coverage and add-on coverage.

Liability Coverage

Liability insurance protects you financially when you cause damage to property, including other cars, infrastructure and buildings, or harm other people in an accident.

Liability insurance includes:

  • Bodily injury liability: This covers anyone you injure in an accident you’re at fault for. Its coverages include hospitalization, lost wages and ongoing therapy.
  • Property damage: This coverage typically applies to damage you cause to another motorist’s vehicle, but it can also cover you if you damage a fence, tree, light post or other type of property.

Liability can also include uninsured motorist coverage and underinsured motorist coverage. This might be the most unfair coverage of all, but it is necessary. If you or your vehicle suffer damage from a hit-and-run or someone who doesn’t have enough coverage to cover the damages they’ve caused, this insurance will cover you. Basically, since other people can be irresponsible, it’s up to you to be responsible for them. Fun, right?

Vehicle Coverage

While liability covers other people’s property, you’ll also likely want coverage for your own vehicle. That’s where collision and comprehensive come in. Neither is required if your vehicle is paid off, but both are recommended for full coverage.

  • Collision insurance covers repairs to your vehicle if you are at fault in a collision with another vehicle.
  • Comprehensive insurance covers repairs to your vehicle outside of collisions with other vehicles. Damage from hail or hitting a deer, cracked windshields, vandalism and theft would fall within the scope of comprehensive coverage.

Medical Coverage

If you or your passengers are injured following a car accident, you will want medical coverage to pay the hospital bills.

There are two components to this coverage

  • Medical payments coverage: This coverage will pay for hospital bills, but it can also cover funeral costs, injuries to you as a pedestrian or cyclist and even dental care. Check with your agent to be clear on your specific coverages. Some of these expenses may overlap with your health insurance.
  • Personal injury protection: You might also hear this as “no-fault insurance.” This insurance will cover your medical bills no matter who was at fault for the accident.

Additional Coverage

You can spring for extras that may come in handy in a time of need. These extras do, however, come at a cost.

  • Rental reimbursement coverage will help pay for the cost of a rental car while you’re having your vehicle repaired or shopping for a new one.
  • Emergency roadside assistance is useful if your battery dies, you get a flat tire or need a tow.

Tips for Reducing Your Monthly Car Insurance Premium

Understanding what each type of coverage means is key to lowering your monthly car insurance premium, specifically because it allows you to reevaluate how much coverage you have and how much you actually need.

I spoke to some drivers to see how they’ve been successful in lowering their monthly car insurance premiums. Many drivers told me to have fewer accidents, get fewer traffic tickets and boost your credit score — but I don’t know anyone who is actively trying to do the opposite.

I did hear some more practical ideas, however. Zach Berry, editor at The News Wheel, told me that the secret to cheaper insurance is also the secret to lower car payments: “Buy used.” Berry’s right; it is typically cheaper to insure a used car because used vehicles cost less to replace as they age and are less likely to be stolen.

Another editor at The News Wheel, Aaron Widmar, was joking when he cited public transportation as the best way to save money on car insurance. But he’s not wrong: If you live in a big enough city and have considered getting rid of your car, remember that it’s not just gas and monthly car payments you’ll avoid. You’ll also knock out expensive monthly car insurance premiums.

Cat Hiles, a freelancer for The Penny Hoarder, avoids the cost of rental reimbursement because she and her husband own two cars together. Due to her job’s flexibility, Hiles and her husband can manage on one car for a while if the other car needs work, avoiding a small monthly insurance cost.

My partner Nick Kreider shops around every year for better rates. While many insurers offer perks for sticking with them long term, like knocking money off a deductible for every year without an accident, Kreider has gotten better rates and deals by getting insurance companies actively fighting for his business.

Automotive marketer Jack Elliott recommends opting for advanced safety features the next time you buy a new car. “The safety features in my new car ended up lowering my monthly payment,” Elliott told me.

Rain Turner, a senior editor for The Penny Hoarder and mother to three egg-laying chickens, told me that she carried the bare minimum 20 years ago. “As a single mom in college in the early 2000s, I used to be all about liability-only. It was cheap and kept me on the road. But we have full coverage on our vehicles now because they are both 13 years old, we are on the road a lot and Todd [Turner’s husband] has been in a couple accidents.” The lesson here: Consider what kind of coverage makes sense for you and don’t pay for more.

Brian Moore, my father and a small business owner in Dayton, Ohio, not only bundles his home and auto insurance for discounts but also combines it with his business coverage. Doing so has netted him even greater discounts.

I participate in my insurer’s safe-driving program. So far, it has saved me 3% a month, but my goal is to get up to 10% off each month. Ask your insurance agency about its safe-driving benefits.

If you are a responsible saver, I also recommend higher deductibles. By choosing a $1,000 deductible over $500, you could save yourself a significant amount of money every month. Simply take that saved money and put it into a sub savings account until you have made up the difference in the deductible, should you ever need it. Then enjoy the savings in future months however you see fit.

Much like taxes, car insurance is inescapable if you own a vehicle in most states. Make the monthly payments a little less painful by doing your homework and making the right changes to your policy.

Timothy Moore, a Nashville-based editor and writer, has written for the automotive industry for five years. He currently drives a Hyper Blue 2017 Subaru Crosstrek and wouldn’t trade it for the world, but maybe for a Tesla.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.



source The Penny Hoarder https://ift.tt/2IHkAQm

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