One of the fastest ways to reduce the premiums on your auto insurance is to increase the deductible and make sure you aren’t paying more than what the car is worth. For example, by raising the deductible from $250 to $1,000 it is possible to reduce your auto insurance rates by 25% to 40% - in addition to other discounts like Safe Driver or Anti-Theft and Security Discounts! 

Closely related to this is spending more on comp and collision than the car is really worth.  Comp and Collision insurance is that portion of the premium that covers your vehicle if it is damaged or there is a complete loss. In the event of a claim, the insurance only covers the actual value of the car – not what it will cost you to buy another one. For example, let’s assume you have an old work truck you use for grubby jobs and as a second vehicle.  As a general rule of thumb, if the vehicle is worth less than 10 times the premium then it might be a good idea to drop the comp and collision coverage.

Before you increase your deductible or reduce comp and collision coverage there are a few things to keep in mind:

• Always have a cash reserve in savings to cover the deductible amount. If you intend to increase the deductible to $1,000 then have that money set aside in a savings account in case of a claim….then leave it alone! It is for emergencies only.
• Know the actual value of your vehicle. You can look up the value of your car at Kelley’s Blue Book at http://www.kbb.com.
• Make sure you can cover the loss before reducing or eliminating comp and collision coverage. Sure, that old work truck might not be worth much for resale value but if it is the vehicle that takes your spouse to work each day then the value to you is much more than the resale value. Insurance is designed to help you cover your losses – having too much insurance just wastes money but having too little insurance means you are at more risk than necessary.  Buy only what you really need to save on your auto insurance.