Chicago Bankruptcy Lawyer Blog

This is not a commercial for gecko insurance, so don’t worry, no one is going to try to sell you anything. I’m just going to try to save you some money. There are a fair number of things you can do to keep your car insurance premiums are down, and you might be doing them already, but does your insurance company know that you are?

Here are some obvious and not-so-obvious tips to reduce your premiums.

• Drive safely, but defensively. Your personal driving record, whether perfect or not, plays a major role in figuring your premium. If you are buying new insurance, while you might be tempted to “fib” and not list a ticket or two (moving violation, I mean, not parking), but by not disclosing it, your application for insurance can rejected.

• Rethink your deductible. Remember, there’s an inverse relationship between your premium and your deductible. You could lower your premium by raising your deductible; put the savings aside for an emergency.

• On older vehicles, it’s not worth keeping comprehensive or collision coverage. Here’s a way to figure that out – times your monthly premium by 10, if your car is worth less than that, drop the coverage.

• Don’t split insurance companies – use the same one for homeowners or rental insurance as you do for auto insurance. Often, you can get a discount for an umbrella policy, which could be as much as 10-20%.

• Pay your premiums as few times in a year as you possibly can. Insurance companies generally tack on a processing fee, so if you pay by the month and the monthly processing fee is $5, over the course of a year that comes up to $60. Also, the premiums are often cheaper when paid quarterly or semi-annually.

• Ask the insurance company if they offer discounts. Many insurers provide discounts for successful completion of a defensive driving course, or for membership in specific organizations, clubs or alumni associations, even for specific professions or if you’re a member of a specific “class” such as a retired person.

• If higher gasoline prices have got you carpooling, or taking mass transit, it is very important that you advise the insurance company. Because you use the car less, statistically, there’s less risk that you’ll get into an accident.

• This might not seem obvious, but keep a watchful eye on your credit report. Unfair as it may be, the insurance companies use your credit report to evaluate you. If your FICO score goes up, you might be able to reduce your premium. Of course, the opposite is also true, so pay your bills on time, and keep your debt load down.

• When your teenager goes off to college, make sure you alert the insurance company of that fact.

• For the teenager still at home, believe it or not, it might be cheaper for you to buy them a second-hand car for which they are primary driver, than to allow them to drive around in your newer car, even as an occasional driver.

• Teenagers with good grades also may be eligible for car insurance discounts, so encourage them to keep up the grades and let the insurance company know about it.

• If you’ve installed anti-theft devices on your car, tell your insurer. They want to know that you’re taking a proactive role in preventing theft, and your premiums will go down.

• Finally, the best way to save on car insurance – by not owning one!


--Debt Diva for DebtStoppers