Seek ways to increase car insurance savings

Car insurance is one of the first insurance policies that a person will buy. However, many people do not understand the coverage nor how to read the fundamentals of the policy. Before a person can determine how to save on car insurance, he/she must understand the limits of liability and how to read the policy.

All policies cover liability which means that damage to another person’s vehicle or injury to another driver will be covered by the policy up to a certain dollar amount (damage to the insured’s vehicle is covered under collision).

The amount that the policy pays is determined by the “limits of liability” which are expressed as: “25/50/25″ or something similar. The first number, 25, represents the maximum payment per accident, on a per thousand basis, which is available for injury per person. The second number, 50, represents the maximum coverage in thousands of dollars per accident for injury to two or more people. The third number, 25, represents the maximum coverage in thousands of dollars for property damage whether it is damage to another vehicle or for personal property that was damaged in the accident, like a building or landscaping shrubbery, etc.

In Louisiana, the minimum allowable coverage for car insurance is 10/20/10, but it is recommended that people carry more than the state minimum. If the limits of liability are exhausted, the injured party can sue the liable party for damages above and beyond what the policy pays. It is also important to remember that if someone is allowed to drive an insured’s vehicle, the insured is liable for damages caused by the driver.

As the limits of liability increase, the cost of insurance increases as well. That is one reason that many people have minimum coverage. But there are ways to save on insurance so that the higher limits are more affordable.

1. Be careful. Accident-free and violation-free drivers generally get preferential discounts for safe driving. Since an insurance company can drop an insured at renewal, insurers prefer renewing drivers with clean driving records.

2. Raise the deductible. An insured can save as much as 20 percent on car premiums by raising the deductible from $100 to $250.

3. Before buying a new car, check with the insurance agent as to how much it will take to insure the new car. Convertibles generally require higher premiums than sedans and some cars are more prone to theft which increases the cost of insuring them.

4. Some insurance companies offer a discount if the car insurance is bundled with a homeowner’s policy or renter’s insurance. It is best to check with the insurance agent to determine if multi-car discount and package insurance is available.

5. Ask your agent. Insurance agents work hard to determine the best price for insurance to fit the needs of the customer. It is always best to spend a little time with the agent going over the policy and looking for ways to cut the cost. Although the agent may have given you the best deal when you first bought the policy, insurance companies may offer new policies or an insured’s needs might change and an insurance check-up is always a good idea. In addition the agent can bring you up to date on any new laws or requirements that might affect you or your policy.

Source : theadvertiser.com