When looking for ways to save money, cutting your insurance costs is usually one of the first things to come to mind. While cheaper insurance policies may be on the market, cheaper does not always mean better. Insurance policies with less expensive premiums may cost you more in the long run. Before you switch to save a few dollars, there are a few things you need to compare.
How Does Coverage Compare?
One of the most common ways insurance companies lower premiums is by lowering the amount of auto coverage offered. Before you change policies, make sure your new policy has as much auto coverage as the policy you are replacing.
For example, if you have a full-coverage policy with 30/60/30 limits, you have $60,000 in bodily injury, with a $30,000 limit per person and $30,000 in property damage. If you exchange your policy for one with 25/50/25 limits, you will lose $10,000 in total coverage, $5,000 per person, and $5,000 in property damage.
These numbers may not sound like you are losing a lot. But unfortunately, if you have an accident and the cost of the injuries and damages exceed your coverage, you can be held liable for the rest.
How Much Is Your Deductible?
Another common way auto insurance policies reduce costs is to raise your deductible. Your deductible is the amount you must pay out of pocket before your insurance kicks in.
Raising your deductible from $500 to $1500 means you will have to pay $1500 before using your insurance if you have an accident. To see if you are saving money, calculate how much the increase will save you monthly and multiply it by 12.
If your savings amount is more than the difference between your old and new deductible, it may be worth your time. But remember to put these savings in your bank account to be readily available to pay your deductible if needed.
How Is The Customer Service?
When you have an accident, you want a company that will quickly address and settle your claim. Look for a company whose claims adjusters respond promptly so your vehicle can get to the shop for repairs.
Before you change companies, check online reviews to see what customers say about the company you are considering. Are the customers satisfied with the services they received?
To learn more about auto insurance, contact an insurance provider near you.