How Do You Buy Auto Insurance?

Insurance Premiums can be a pain, but there may be smart ways you can reduce their impact on your wallet, such as raising your deductibles, dropping collision insurance on an older car, requesting special discounts or consolidating your policies with one insurance provider.

Higher Deductibles Means Lower Monthly Payments

The easiest way to save is by increasing both the collision and comprehensive (damage due to vandalism, fire, and flood) deductibles for damage to your auto. As a practical matter, if you have a $500 deductible and $700 of damage to your car, would you even put in a claim? Many folks wouldn’t for fear it would raise their rates.

It Pays to Have Uninsured Motorist Coverage

This protects you and family members living with you if you happen to be hit by a negligent driver who is uninsured or “underinsured,” even if you’re walking, bicycling or skateboarding at the time. In California an “insured” motorist in the assigned risk pool can carry as little as $15,000 in bodily injury coverage per person and $30,000 per accident.

In many states uninsured motorist protection isn’t mandatory coverage. The amount of uninsured/underinsured motorist coverage you carry should match your auto policy’s primary liability limits, which is the maximum amount your insurer will pay the other guy if you cause an accident. For most policies, that amount is $100,000 per individual and $300,000 per accident on a primary auto policy. That limit should be where your umbrella kicks in. Check how much your umbrella requires your auto policy to cover, since some require as much as $500,000 per accident. Make sure there’s no gap in coverage between the two policies.)

Carry a Big Umbrella

An umbrella, or “excess,” policy kicks in where your liability coverage for your auto and home ends and is a necessity if you have any assets to protect. $1 million umbrellas are the most common, but $2 million is more realistic these days. Recent jury verdict data shows that 14% of personal injury liability cases result in awards in excess of $1 million. If you have teenagers driving, consider increasing your umbrella. The second million is cheaper than the first. Expect to pay $125 to $250 a year extra for $1 million of such coverage.

You can often save on an umbrella by buying it through the same insurer you get your auto policy from. Find an independent agent like Breathe Easy and ask for combined quotes from several carriers. Make sure that you compare the coverage of each umbrella.

There are Discounts That You Didn’t Even Know Exist!

Certain discounts, like the good driving record discount, are usually applied automatically. Other discounts require action on your part. One example is taking a defensive driving course, as you age, taking this course could earn you a little discount with some providers. If you start driving less or using a car pool to get to work, call your insurer and ask for a discount. You may also be able to save by buying through a discount program at your place of work. If you have a teen driver, ask for the good student discount.

Does Your Teen Actually Need Their Own Car?

Most times it is cheaper not to add a third car when you’re adding a teen driver to a two-parent, two-car family, because insurers rightly assume the teen will drive less without his or her own car. (Even without a third car the average annual premium goes up 58% with a teen added, according to Though, if you and your spouse both drive new luxury cars with collision coverage, then you might reduce both premiums and family conflict by buying an older or low-end car without collision insurance. Beware, though, some insurers charge as if your teen is driving the fanciest car in the garage, even if you swear they won’t. So you may have to sell your midlife-crisis or get a different insurer.

What is “Limited Tort” Insurance and Why Should I Avoid It?

Limited tort means that, even if the other guy is at fault, you generally cannot collect payment for your “pain and suffering”–extra money that may be needed, say to get help around the house if you’re laid up.

In some states, including Pennsylvania and New Jersey, you can buy “limited tort” coverage at a discount, but be wary of what you’re giving up.

Cover for Total Wrecks

If you’ve got a car older than five years or so (depending on the model) it may make sense to drop collision and comprehensive. If you wreck your car or it’s stolen, most insurers will pay out the depreciated value, which could be less than it takes to replace your older car. So, if you’ve got a car older than about five years (depending on the model) it may be a good idea to drop collision and comprehensive. That’s also true if it would cost more to repair your car than it is worth.

On the other hand, if you have a car loan outstanding or are leasing a car, consider topping of your coverage. Some insurers, for example, offer “gap” insurance, which pays the difference between the depreciated value and the amount needed to pay off the loan or lease, and raises comprehensive and collision costs an average of 7%.

For more information and tips on getting the best rates, call Breathe Easy Insurance Solutions at 866.822.7755.

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