Insurance World

Are you paying too much for your auto insurance? If you believe you are paying too much for your current auto insurance coverage then the following suggestions may help you save money:

1. Shop around
Sure, you’ve read this tip everywhere but it’s true. Only by shopping around for auto insurance coverage and getting quotes on premiums from several insurance companies will you be able to know for certain you are getting your car insurance coverage at the best available rate.

When shopping for your auto insurance policy, remember to compare more than insurance rates. Ask about how insurance claims are approved and processed, and how quickly they’re paid. Look into each insurers’ financial stability (there are independent rating services that can help you with this.) Remember, during times of stress like after an accident you will be dealing with the insurance company and you’ll want to make sure you’ll be helped when you need it most.

2. Select a higher insurance deductible
When you file a claim, a deductible is the amount you pay first before your insurer pays the remaining balance. Often people select lower deductibles, so when they have to submit a claim, their out-of-pocket expenses are minimal. But the truth is, the higher your collision and comprehensive deductibles the lower your auto insurance premium. The savings by increasing your deductible to say $1,000 from $250 are significant—you can save hundreds of dollars off your insurance premium.

Of course, the flipside is that if you should have to submit an insurance claim you are responsible for paying the deductible. So select the maximum deductible you can afford to pay—the higher the better because the difference in your car insurance premiums will mean more cash in your pocket.

3. Remove or reduce coverage on older vehicles
If your car is getting up there in age, you may want to think about dropping the collision or comprehensive coverage (or both) on your policy. You need to think about this one though - it’s not always a clear-cut decision. You need to weigh the cost of the two coverages with the value of your car and your chosen deductibles. For example, if you had a 10-year-old car that’s worth about $1000, and your deductible was $1000, the coverage is not actually going to help you.

4. Ask about discounts
Most insurance companies offer discounts. While the availability of discounts will vary depending on your insurer, where you live and whether you meet eligibility, make sure to ask if there are any discounts you can take advantage of. The following is a list of a few of the more common discounts (if available in your state, each insurer will have different eligibility requirements):

•
Multi-vehicle discount - available if you insure multiple vehicles with the same insurer
•
Multi-line discount - available if you insure your home and auto with the same insurer
•
Good driver discount - if you have not had an accident or ticket in a long time
•
Good student discount - if you’re a student with good grades, usually about a B average
•
Safe driver discount - if you’ve taken and passed an accredited driver safety course
•
Anti-theft discount - if your vehicle has certain anti-theft devices installed
•
Safe vehicle discount - if your vehicle has certain extra safety features
•
Retiree discount - if you’ve reached a certain age, usually 50 or 55
•
Low mileage discount - if your vehicle is not driven often
•
Occupational discount - if you work in a certain field or hold a certain degree
•
Auto club discount - if you are a member of an auto club, like AAA
•
Association discount - if you belong to certain associations, like your alma mater
•
Away-at-school discount – if your child is attending school out of town

5. Choose a car that costs less to insure
If you’re purchasing a new car and have narrowed it down to two or three options, compare the auto insurance rates of each to see if there is a notable difference in the cost to insure. Remember, insurance rates are more for vehicles with high theft rates and repair costs. If there is a significant difference in cost to insure your first choice car, you may have to reconsider.

6. Drive safely
OK, this one is obvious but true. Driver’s with no accidents, tickets or insurance claims almost always pay less for their auto insurance coverage. Your driving record is an influential factor in determining your insurance rate. Tickets and at-fault accidents affect your insurance rates for years. With a less than perfect driving record, you can find yourself paying a lot of extra insurance premium over the years.

What would you do if an illness or injury left you unable to care for yourself? The chances of that happening might be greater than you think.

The U.S. Department of Health and Human Services indicates that people 65 and over face at least a 40 percent risk of entering a nursing home, while the U.S. Government Accountability Office estimates that 40 percent of the 13 million people receiving long-term care services are between 18 and 64.

Despite the risk, a 2005 Kaiser Family Foundation survey shows that only two in 10 (21 percent) adults say they have long-term care insurance. While cost is a common deterrent, LIMRA International, a market research organization, says that people who have never shopped for policies overestimate the cost by as much as five to 10 times.

“Premiums vary due to age, health and policy type, but most middle-income consumers can benefit from a long-term care policy,” said Scott Perry, executive vice president and chief operating officer of Bankers Life and Casualty Company, the 127-year-old insurer that specializes in the mature market. “Like other insurance, the younger and healthier you are when you buy, the less expensive the premiums.”

Planning for long-term care is encouraged while in your early 50s. As you research, remember to:

Determine long-term care costs.

Read about long-term care coverage.

Explore what’s available. Compare several insurers’ policies. Choose a well-established company with solid financials. Long-term care can be challenging and emotional, so you might want help from agents experienced in serving the mature market.

Determine what you can afford. According to the Life and Health Insurance Foundation for Education (LIFE), a good rule of thumb is to spend no more than 7 percent of your gross income on long-term care premiums. Consider spousal discounts and how different elimination periods, daily benefits and maximum benefits affect premium cost.

Involve your children. A 2004 survey sponsored by Bankers Life and Casualty Company found that adult children overestimate their parents’ planning, while older adults think they have the proper policies but are confused as to what they actually cover. Sixty percent of seniors mistakenly believe Medicare will cover long-term care costs. These disconnects can put unexpected financial burdens on both generations.