Lowering Insurance Costs – Tip #5 – Reduce coverage

Reduce Coverage You Do Not Need

This tip mainly applies to those with older cars that have low market value (worth less than 10x your premium).  Dropping collision and/or comprehensive coverage on these type of vehicles may be a wise choice, as the claim amount is unlikely to exceed the cost of the insurance and deductible amount.  This is, of course, is contingent on ones financial situation.

J. Robert Hunter, director of insurance with the Consumer Federation of America, advises this:

“Take your comp and collision premium and add it up, then multiply it by 10. If your car is worth less than that, don’t buy the coverage.”

Websites such as Kelley Blue Book or Edmunds.com will allow you to determine your car’s worth.

I am switching insurers and will be saving a good amount each month by doing so.  There will be one final post of the ‘Lowering Insurance Costs’ series where I’ll show a side by side comparison.  Hope these tips have been helpful!

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