1. INCREASE YOUR DEDUCTIBLE. Decide that you’ll pay for small accidents out of pocket and raise your deductible, say from $250 to $1,000. The point of insurance is to protect you from major, not minor, accidents. Savings: As much as 15%, sometimes more.
2. SKIP COLLISION COVERAGE. If you’re driving an old clunker, you can drop the collision coverage. Insurers will not pay out more than a vehicle’s book value, even if it’s totally ruined in an accident. Never pay more in collision coverage than your car is worth. Savings: Up to 25%.
3. BE A GROUPIE. You may be able to insure your car, real estate, and life through your employer. Check with your benefits manager. If not, make a list of all the groups, professional associations, and organizations of which you’re a member. One or more of them is likely to sponsor a discount plan. Savings: 5% or more.
4. TAKE ADVANTAGE OF BEING RETIRED, OR EVEN FIRED. If you’re no longer commuting to work or if you’ve started to work from home, negotiate for a lower premium. Savings: 5% or more.
5. BUY A USED CAR. It will cost significantly less to insure. Savings: Up to 30% in some cases.
6. SPEAK UP FOR ADDITIONAL DISCOUNTS. You’re entitled to them, but they are rarely advertised. Tell the insurance company about any of the following that apply.
• Has other insurance with the company
• Is accident-free
• Is in a car pool
• Is a member of AARP
• Is over age 50
• Is insuring more than one car
• Is a member of a preferred profession (engineer, scientist, or teacher, to name a few)
7. SLOW DOWN. A clean driving record can qualify you for a “good driver” discount. This means that you can’t have more than one minor blemish, such as a speeding ticket or non-injury accident, on your driving record in a three-year period. Savings: Up to 20%.
8. DRIVE A LOW-PROFILE CAR. Hot models, all sports cars, and luxury numbers cost much more to insure than the more pedestrian models, principally because they have higher theft rates. For a list of the most frequently stolen cars, check with the Insurance Information Institute at www.iii.org.
9. GET THE RIGHT DEVICES. Certain ones reduce costs, including:
• A hood-locking device
• A wheel-locking device
• A security alarm
• An ignition cutoff system
10. GIVE YOURSELF CREDIT. Your credit score can play a role in setting your auto insurance premium in many states. If you’re a good credit risk, insurance companies figure you’re a better insurance risk, too. If you’ve had some problems with your FICO credit score but have recently managed to raise it, tell your insurer. If the company uses an insurance risk score and reruns your numbers, you could now fall into a better risk pool, which will mean a lower premium. A recent study shows that more than 50% of drivers and homeowners pay less in premiums as a result of favorable credit scores.
Excerpted from Recession Proof Your Financial Life by Nancy Dunnan © The McGraw-Hill Companies, Inc.