January 29, 2010

Keeping Your Auto Insurance Bill Low After Making A Large Claim

You may see yourself as a good driver and a low-maintenance customer who doesn’t create too many problems for an auto insurance carrier. Imagine that one day you have an accident, perhaps through no fault of your own. However, you recognize the implications the event may have on your auto insurance policy. Your friends tell you that an auto insurance claim may cause your premiums to increase, whether you were at fault or not. Fortunately, insurance law is not quite that fatalistic. Nonetheless, you can expect to feel some of the effects of the accident in your future premiums. However, it isn’t the end of the world and there are some measures you can take to keep your auto insurance premiums in check.

One of the first things you can consider is to raise your deductible. You could wind up having to have to pay the first several hundred dollars of a loss out of your own pocket. However, it would ultimately bring your premiums down. The premiums for a policy with a $200 deductible will be higher than those for a $500 deductible. In other words, you’re essentially telling the insurance carrier that you don’t want to pay lower premiums, but in the event of an accident, you realize you’re going to have to pay for the first few hundred of the loss.

This is not for everybody, but it is one of the most commonly used methods for lowering premiums. Another method to lower your premiums would be to reduce the limits on your liability coverage. However, you should realize that with this move, you are actually making a reduction in the quality of your insurance. Instead of carrying generous coverage limits of $100,000/$300,000, you may opt for lower limits. However, you should realize that lower limits signifies that in the event that you are sued, the party suing you is going to receive less money from your insurance carrier. If that particular person or their lawyer is not satisfied with the payment, a possibility exists that they could come after you personally for the loss. This could result in an expensive way to lower your premiums, and ultimately this choice greatly depends on your personal financial situation. If you have considerable assets that might be at risk in the event that your insurance coverage was inadequate, you might feel more comfortable in sticking with simply tweaking the deductible.

Another way to lower your premiums is to take a defensive driving course. This can lower your liability premiums by as much as 10% in some cases. However, there may be limits as to how frequently you can take such a course.