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Car insurance tinkering
April 23, 2008, 7:59 pm
Filed under: Money Basics

For the past month or so, I’ve been meaning to take a look at Jake’s and my car insurance policies to see how raising our deductibles would affect our premiums. Jake has been worried financially about the coming weeks because he’s expecting to receive a less than normal paycheck at the end of this week (he’s paid mostly on commission) and I figured this would be an ideal time to give our policies a once over.

My policy is pretty much bare bones right now and my comprehensive and collision deductibles were only $500. I raised those to $1,000 and my premium went down $10 a month for doing so. Total yearly savings: $120.

When I looked over Jake’s policy, I was surprised to see that he was paying for a few options he didn’t need. He had chosen to have rental car reimbursement, loss of income coverage, and additional medical coverage. His comprehensive and collision deductibles were $500. I put all of the extras to zero and raised his deductibles to $1,000. His premium went down $17 a month. Total yearly savings: $204.

Over the next couple of years, I’m going to keep a close eye on the value of my car. Once it drops down to less than $3,000, I’m going to pull my collision coverage completely to save a few hundred dollars a year on my insurance.

For only a few minutes of my time, I managed to save us $27 a month or $324 a year. Not too shabby!

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2 Comments so far
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You really pulled rental? That is one option I make sure is on there. Even if a wreck totals your car, you will most likely need a rental for a week or two just to help you buy a car. I completely agree with raising your deductible as high as you can afford and the income protection (as long as he has income protection at work or you two feel comfortable you could afford the bills and medical deductions on your insurance.) I work in a refinery…I have a much much better chance at being in a car wreck going to and from work than I do getting injured. Car insurance is one place I don’t cut back too much on. Also, have you looked into any savings for making larger payments more often on your insurance?

Comment by Sara

As far as rental cars go, I feel like if one of our cars was totaled, we’d be able to use the other’s car, catch rides with friends, and or borrow a car from a relative until we could buy a new one (the same would be true if we needed to wait a few days/weeks to get one of our cars fixed from an accident). We’re also considering getting AAA and I’m almost positive that they offer rental car coverage with their memberships.
I have looked into saving money by paying for the insurance on a less than monthly basis. Unfortunately, we don’t have enough money saved up right now to pay in one lump sum, so we’re forced to do monthly payments. I’m hoping this changes in the future though!

Comment by Sarah




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