We hear it all the time. Everyone is looking for affordable auto insurance. What does affordable really mean? What is considered affordable is different for everyone. Insurance is not a one size fits all product. There is some flexibility within auto insurance that allows you to make value and cost meet. However, insurance is also a product that you shouldn’t force to fit your budget.
Recently, the City of Paducah, Kentucky voted to increase the insurance tax by 1%. While 1 % sounds minor, city residents will see an increase to their upcoming insurance invoices. Increases in cost that are somewhat out of our control, like taxes, can lead consumers to look at cuttings costs they can control, like coverage. We understand the importance of analyzing your financial situation and being proactive in how you manage your expenses; however, cutting coverage is not the best way to make your situation better.
Here are some tips on how you can find affordable auto insurance that will still protect you from catastrophic loss.
Consider Raising Your Deductibles.
The deductible is what the consumer must pay to repair a vehicle before insurance kicks in. We typically see deductibles between $500-$1000. You need to assess your financial situation and decide what amount would be possible for you to pay out of pocket at a time of loss without causing financial harm. A higher deductible not only reduces premium, but it also keeps consumers from turning in small claims that lead to costly rate increases over time.
Consider a Telematics Option.
Telematics programs are designed to provide a true insurance rate by monitoring actual driving behaviors rather than statistical data. Drivers with no activity on their record would be able to improve their insurance rates through this type of program. However, there are some drawbacks to telematics programs. You can determine if this device is right for you by reading one of our prior posts here.
Consider Your Payment Plan.
Paying your policy in full as opposed to on a monthly installment can provide you a discount and prevent billing installment fees. It won’t work for everyone. But if you can maneuver your money to make this work for you then you could save a small chunk of change annually. If you can’t pay your policy in full then you might look at having your payments deducted from your bank account rather than mailing payment in. Automatic Withdrawal pay plans typically still have a small discount and less billing fees than when billed by direct mail.
Finally, Talk to Your Agent.
Before making any moves you should definitely talk to your agent. When you work with an independent agent, you have access to multiple insurance markets. It could be that, while unfortunate, your rates are in line with the rest of the market and you need to stay put. But it is also possible that you have become eligible for added discounts since your last meeting. Take full advantage of the relationship you have with your local independent agent. If you do not currently work with an independent agent then you can reach out to us here at Bradshaw & Weil, Inc.