How to get more and pay less on your car insurance

Remember “Fried Green Tomatoes”? In the 1991 film, Evelyn Couch (played by Kathy Bates) rear-ends a car in the grocery store parking lot – six times – after the space she’s been waiting for is stolen by two women in a sports car, who claim they’re “younger and faster.”

The damage done, Couch responds, “Face it, girls. I’m older...and I have more insurance.”

Insurance is one of those things we accept as a necessary evil; something we dutifully pay for each and every month – and pray it’ll save our butts when things go wrong.

According to Dave Minor, vice president of TD Insurance, getting to know how car insurance works and how its rules relate to your situation can help you to cut down on your premiums – often drastically. Here are some tips to get the coverage you need - without paying more than you have to.

1. The car

If you can’t live without heated leather seats and a top-of-the-line surround-sound stereo, you’ll probably have to live with higher car insurance premiums. The more your car is worth, the more it will cost your insurance company to repair or replace it if you’re involved in a collision. According to Minor, this is especially important to consider when you’re shopping for a new car – something many people don’t realize can affect how much they pay for insurance. Consider going online and getting some quotes before sealing the deal at your local car dealership.

2. The record

The way you drive is a way for your insurance company to determine how much risk you pose. That means that the longer you can keep a clean driving record, the lower your premiums. For many of us, hitting rush-hour traffic can cause a Jekyll-and-Hyde-type transformation. Just check yourself out in the rear-view mirror the next time you feel your temperature rising. It ain’t pretty. And if you hit something, it can do some truly ugly things to your car insurance rates.

3. The coverage

There are all different types of car insurance coverage. Do you know what your policy covers - and what it doesn’t? Minor says the first step is to take a close look at your policy to determine what’s included (or not). Do you have coverage you don’t need? Are you missing coverage you should have? If you’re driving an older vehicle, collision coverage may be one place to cut back, especially if it makes up a significant portion of your premium.

“Ask yourself whether it’s really worth paying collision coverage on a car you wouldn’t replace or that would cost very little to replace.”

4. The policy

Minor says that one way people tend to miss out on savings is simply by failing to ensure that their insurance company has all the correct information about them. Maybe you’ve changed jobs and reduced the length of your commute, or a younger driver on your policy has taken additional training. Informing your insurance company about these and other changes can help cut your insurance costs almost instantaneously.

“Make sure your insurance policy has everything correct and up-to-date, such as the ages of the drivers, miles that are driven and whether young drivers have taken driver’s ed,” Minor said.

5. The trip

Think about when most accidents happen. Yup, you guessed it – rush hour. According to the Insurance Institute for Highway Safety, the hour of the day during which the most automobile accidents happen is between 5pm and 6pm. What that means is that if you are using your car to travel to and from work each day, you’ll pay a higher premium, particularly if you’re doing that driving in an urban setting. One key way to reduce your car insurance rates, therefore, is to change the way you drive. If public transit is an option, using it to travel to work can mean a drastic drop in your insurance premium. Reducing the average number of miles you travel can also cut costs.

6. The deductible

A deductible is the amount you are responsible for paying if you are in an accident that is determined to be your fault (in which case your insurance company pays the damages). If you have no deductible, you won’t have to pay anything if you are involved in a collision; the downside is that you’ll have to pay more – often considerably more – for your insurance premiums each and every month. Ask your insurance provider how a higher deductible would affect your monthly premium. Then ask yourself this: Will a one-time cost of $500 or $1,000 in the case of an accident save you enough throughout the year to make the risk of having to pay that deductible worthwhile? For many people, the answer is yes.

7. The discounts

The final thing to look for when it comes to reducing your car insurance premiums is discounts. In fact, many companies offer all types of rebates for consumers. The most common results from combining home and auto insurance together, Minor says, but there’s a whole list of others, including discounts for seniors, infrequent drivers and for the installation of approved anti-theft devices. Minor says drivers should also seek out discounts from their employer, professional association and even their post-secondary institution. Furthermore, how much you pay will often depend on the insurance provider you choose. Different providers weigh the factors they use to calculate premiums differently, which means you can get dramatically different numbers from different insurers.

“With the access to information available through the Internet these days, it’s a lot easier to shop around and educate yourself,” Minor said. “Most companies have very informative websites where you can learn about insurance, check out the policies available and even get a quote. Another great source is the Insurance Bureau of Canada, which provides extensive information on car and home insurance.”

Research, retooling & restraint

Getting a great car insurance rate takes a little research, a little retooling of your policy and, for some of us, a little personal restraint on the road. We all like to fantasize about teaching another driver a lesson; the reality is that we pay for just about every mistake we make on the road, no matter how much insurance we carry. And while we all want to cheer for Evelyn Couch when she takes revenge on the sassy young thing who zips into the parking stall she’s been waiting for, we also know that in the real world, she would be the one paying the bill. Too bad she didn’t read her policy before she hit the road.

GoldenGirlFinance.com is a free personal finance and education site for women.

Nothing contained herein is intended to provide personalized financial, legal or tax advice. Before implementing any financial strategy, you should obtain information and advice from your financial, legal and/or tax advisers who are fully aware of your individual circumstances.

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