Auto Insurance and You

Is there anything I can do to lower my auto insurance bill?

Yes. Insurance companies base auto insurance rates on a variety of criteria, such as your age, driving record, residence, and even the type of car that you drive (though factors vary from state to state). If you find that you’re paying more than you think you should for auto insurance, there are ways you can lower your premiums.

• Shop around: Auto insurance rates vary from company to company, sometimes significantly. As a result, a good way to save money is to look into whether another insurer offers the same coverage at a lower rate.

• Consider raising your deductible: For the most part, the higher your deductible, the lower your premiums. Before you raise your deductible, though, you’ll want to be sure you can cover the out-of-pocket expense should an accident occur.

• Eliminate unnecessary coverages: For example, if you have an older car, it may make sense to drop your collision and comprehensive coverage since a claim paid by your insurance company may be minimal and might not exceed what you’d pay in premiums and deductibles. Or, maybe you are paying your insurer for roadside assistance coverage that you already have through a separate road and travel club membership.

• Consider changing the type of car you drive: The type of car that you drive directly impacts what you pay for insurance. Typically, newer, higher-priced cars and sport/high-performance vehicles cost more to insure than used/lower-end models.

• Check for discounts with your insurer: Depending on your circumstances, you may be eligible for one or more auto insurance discounts. For example, your insurer might provide discounts to those with a safe driving record or to those who insure more than one car with them.

One final note: Don’t be tempted to save money on your auto insurance by lowering your liability coverage limits (although state minimums do apply).

Having less than adequate amounts of liability coverage can expose you personally to claims for other people’s losses – which, in the case of a serious accident, can be significant.

My teenage daughter just got her driver’s license. Will my auto insurance rates go up?

The short answer is: yes.

Anytime you add an extra driver to your policy, your rates will increase. However, you may end up paying even more when you add your daughter to your policy, since teenage drivers are some of the highest-risk drivers on road. According to the most recent statistics from the National Transportation Safety Board, teen drivers have represented less than 7-percent of the driving population but have accounted for more than 13-percent of drivers involved in all deadly crashes. (Source: National Transportation Safety Board, October 2013)

Fortunately, there are some steps you can take to help make insuring your teen a bit more affordable.

• Take advantage of policy discounts: Your first step should be to ask your insurer if your teen qualifies for any policy discounts that are specifically designed for teens. For example, many insurance companies offer discounts (usually around 10- to 15-percent off of premiums) for teens who complete a driver’s education course, obtain a certain grade point average, or participate in a safe driver program.

• Consider the type of car your teen will be driving: Typically, new cars are more expensive to insure than older ones. As a will increase. However, you result, you may want to consider purchasing an older, less expensive car for your daughter to drive. You may even be able to save more money by forgoing collision coverage on an older vehicle.

• Consider whether an individual policy makes sense: In the future, circumstances may arise where it may be more affordable to insure a teen under his or her own individual policy as opposed to listing him or her as an insured on your policy (e.g., he or she gets into an accident or has numerous motor vehicle infractions). When the time comes, ask your insurance agent to help you run the numbers to see which option is more affordable.

• Be sure to shop around: You’ll want to take the time to compare the rates offered by different insurers. Insurance company rates vary widely, so it often pays off in the end to do your homework.

Please call me to find out more information, Jennifer Williams, President J. Williams Personal Financial Planning: 413 S. Curry St, Tehachapi, California Office Phone 661-822-7517 Office Email: [email protected] Jennifer is a Registered Financial Consultant. She has over 20 years of experience in the industry.

Article is Courtesy of Forefiled, LLC Securities offered through NPB Financial Group, LLC. A Registered Investment Advisor/Broker-Dealer Member FINRA, MSRB, and SIPC.