04.24.08 | The Best Auto Insurance Tip Ever
Want to be smart about how you approach auto insurance? Ever wonder about how to set your deductibles? Here is how I kept my insurance payments low by setting a high deductable and then only having to pay $150 of my deductable anyway. I recently crashed my 2007 Ducati GT1000 motorcycle last Friday on the way to work. I was taking a left hand turn and lost traction on a wet crosswalk the result of which landed me on my helmeted chin and my bike on its side. Other than a bruised ego I’m fine but the motorcycle needs $3,000 in repairs.
When I called my insurance company I asked them how much a $3,000 claim will impact my yearly premium. They said that it would raise my premium about $600 for the next five years. If you do the math, in essence I’ll be paying for the repairs myself over time on top of my regular insurance payments. So what are my payments for? Or better yet what were my 10 years of accident free payments for? Apparently only to have the slip of paper proving I have insurance. So while not every increase in premiums is going to mathematically work out perfectly like this, if you make a claim your premiums will go up and you will in essence start paying for the repairs yourself.
So how does this impact your auto insurance strategy? Since the payments you make all those accident free months don’t benefit you but rather your insurance companies own investment portfolio, you should keep them as low as possible. This means raising your deductibles as high as they can go. What if I get in an accident and I can’t afford to pay a $1,000 or $1,500 deductible you say? Sure you can afford and you can get the benefit of having your money work for you and not your insurance company.
Get an auto insurance quote with the minimum deductible and another with the maximum deductible. Figure out the difference and instead of giving it to the insurance company to have for their own investments, put it into a high yield savings account like the Orange Savings Account and let your money work for you and not them. (If you win a scholarship at www.ScholarshipPoints.com by entering the code: INSURANCE that will help keep cash in your savings account too.)
If you get into an accident it’s better to have a high deductible for which you’ve got a savings account set up. A high deductible means you’re going to end up claiming less because your claim is the total damage estimate minus your deductible. That means your insurance premium will go up less as well saving you even more money. Anyway you look at it making your deductibles as high as possible is the smart move. That is if you can be disciplined and save the difference between the two premium quotes.
Hopefully this saves some of you some money and encourages you to start saving more as a way to insure yourself. I also hope that you take it easy turning wet corners on crosswalks while riding a motorcycle or bicycle or razor scooter.
PS. To even make my point more exciting, my insurance adjuster just looked at my bike and since some of the damage is very minor and hardly noticeable he asked me if I would accept half the payment for a few items and in return the insurance company would lower the deductible I actually have to pay. For mt $1,000 deductible I am actually only going to pay $150 and live with a scrape on my kickstand and the bottom of my muffler which nobody can see so I saved lots of money by keeping my deductible high.
PPS. I should mention that if you buy and insure a nice new car today and smash it up tomorrow before you’ve had time to save the deductible you’re probably in trouble. This tip is a suggestion for those who can save. If you cant be responsible enough to save this might not make sense for you but if you are a saver this is the way to go!
Popularity: 45% [?]
Very insightful!
April 28th, 2008 | #
good article, but it’s not a topic i’m interested in.
April 28th, 2008 | #
It was mostly good information that would be useful if someone didnt know how insurance premiums and rates go up after an accident. It also was a good source of information esspecially on how to save money by taking lesser claims and other money saving ways so that when that rainy day does come, you wont have massive debt in your lap.
April 28th, 2008 | #
Be careful about calling your insurance company. I don’t know about the rest of the country, but here in Florida, just calling your agent about a possible claim will ding your insurance history. Yes, just the call, not a claim.
Also, a high-deductible policy is only good if you have the money to pay for the deductible.
Insurance is also dependent on credit scores. If you have a spotty credit history with a low score, you will pay more for you auto and homeowners insurance in most places in the country. (Some places like California have made it illegal.)
April 29th, 2008 | #
Very interesting article. I may have to give it a shot. My insurance is sky high now!
April 29th, 2008 | #
I Like this Article
April 29th, 2008 | #
Thanks for posting this because now I’m aware if the danger out there and know to call my insurance company today and tell them to switch my insurance from liablity to full coverage!!!!!
April 29th, 2008 | #
very intersting article. i may have to give this a try!
April 29th, 2008 | #
I TOTALLY AGREE. KEEP THE DEDUCTABLESS AS HIGH AS POSSIBLE.
April 29th, 2008 | #
I think i will think about insurance in a different light for now on.
April 29th, 2008 | #
very interesting article….i like it
April 29th, 2008 | #
It’s always good to hear information about insurance in “common man” terms. It is so much more comrehensible than the actual insurance agent’s.
April 29th, 2008 | #
I thought the article was interesting, but I like my insurance I have right now.
April 29th, 2008 | #
agree 100%
April 29th, 2008 | #
this is very helpful and i will have to try this
April 29th, 2008 | #
this is good stuff!
April 29th, 2008 | #
I like the article.
April 29th, 2008 | #
I liked this article . very interesting.
April 29th, 2008 | #
interesting article
April 29th, 2008 | #
I will consider it.
April 29th, 2008 | #
very very interesting article : )
April 29th, 2008 | #
I don’t know much about America but in Vietnam, you shouldn’t trust insurance company. When they introduce the insurance to you, they have many offers but then after you buy it, they don’t keep their promise or don’t give you the offer as good as they say.
April 29th, 2008 | #
Learned something new everyday!
April 29th, 2008 | #
Great information, I’ll keep it mind when I start paying for my car insurance.
April 29th, 2008 | #
Thanks for the summerized research analysis;your work and time spent organizing this report just saved me money.:)
April 29th, 2008 | #
not only is this very insightful, but i really makes you think about maybe having a smarter approach.
April 29th, 2008 | #
This is very helpful, since i got in an accident recently, my insurace company was able to pay for the rest of the damage on my car since the other person was not covered under full coverage.
April 29th, 2008 | #
thanks for posting this where is this offered we live in florida
April 29th, 2008 | #
thanks
April 29th, 2008 | #
Very good idea, I have to change my deductible.
April 29th, 2008 | #
insightful, but the topic bored me.
April 29th, 2008 | #
up with the deductibles!
April 29th, 2008 | #
very interesting article, completely insightful
April 29th, 2008 | #
Both interesting and insightful
April 29th, 2008 | #
Very insightful! I have never been told having a high deductible can be beneficial.
April 29th, 2008 | #
I agree.
April 29th, 2008 | #
this plan is sound. The trick is keeping the savings account flush by continuing to fund it with the monthly savings you make over the low or no deductible rate.
April 30th, 2008 | #
This is a great article that provides info about insurance.
April 30th, 2008 | #
Interesting article.
April 30th, 2008 | #
good information.april 30
April 30th, 2008 | #
wow!
April 30th, 2008 | #
Thanks for the knowledge, for those of us who don’t like to learn from first hand experiences, I appreciate what you have taught here.
April 30th, 2008 | #
this is very helpful information that I very much needed
April 30th, 2008 | #
VERY INTERSTING ARTICLE
April 30th, 2008 | #
trouble does never come alone
April 30th, 2008 | #
This is very informative, but not provided by the insurance company when you call them. THANKS
April 30th, 2008 | #
Wow
April 30th, 2008 | #
This is helpful information. One year ago I was involved in a four car pile up. I was the last car so the blame was put on me, when the first two cars had already hit before my approach and the car in front of me slammed on brake to avoid hitting them and she still slid into them and I then slid into her. Anyway my insurance provider had to pay for all cars involved and including mine which was the worst. My insurance premium went up ofcourse. I had been paying for insurance for so long without any accidents or even tickets for that matter I felt it was wrong, so I switched insurance company’s, however I have always been told that I should keep my deductibles as low as possible.
April 30th, 2008 | #
very interesting
April 30th, 2008 | #
very helpful
will use
April 30th, 2008 | #
good advice
April 30th, 2008 | #
I should reiterate that this advice is only for you if it makes sense for you. If you are scared about having to pay a high deductible because you are not a good saver then by all means leave your deductibles low. In an ideal world however one should simply save their extra money and use it only if they get into an accident rather than giving it to the insurance company and never seeing it again.
April 30th, 2008 | #
Good article. Thanks.
April 30th, 2008 | #
Cool information!
April 30th, 2008 | #
I knew this…good to have the confirmation.
April 30th, 2008 | #
not bad
April 30th, 2008 | #
very informative, thanks
April 30th, 2008 | #
It good for someone who didnt have the extra cash for repairs
April 30th, 2008 | #
Excellente! I liked it!
April 30th, 2008 | #
helpful
April 30th, 2008 | #
Awsome advice.
April 30th, 2008 | #
Insightful, but nothing i needed to know.
April 30th, 2008 | #
INformative but a topic not of interest to me
April 30th, 2008 | #
Thanks for the information!!!
April 30th, 2008 | #
Thanks
April 30th, 2008 | #
Interesting
April 30th, 2008 | #
If people were careful drivers in the first place, they would not need insurance.!! Good article though.
April 30th, 2008 | #
cool
April 30th, 2008 | #
Nice
April 30th, 2008 | #
It sounds good if you have enough to save to do it.
April 30th, 2008 | #
Interesting
April 30th, 2008 | #
thanks for making the article and informing ppl of this.
April 30th, 2008 | #
Im glad i dont have a motorcycle…
April 30th, 2008 | #
Good seggestions
April 30th, 2008 | #
very interesting and informative, thanks for such info
Lori
May 1st, 2008 | #
sad to see a ducatti smashed. interesting though.
May 1st, 2008 | #
Very good Information. But you dont blame the insutance company. The entire living is for those who can think. Remember yo said for those who can save. So for those who cannot save, the insurance outfit will have to be making there own earnings from them. But in all,it is a good write up because it will enlighten those who can save on their own.
Regards.
May 1st, 2008 | #
I do not drive nor do I own a car, however, I hope to change that, and when I do this blog will prove to be very helpful.
May 1st, 2008 | #
Interesting, doesn’t really have to do with me though.
May 1st, 2008 | #
hmm…
May 1st, 2008 | #
We used to have a motorcycle - glad we don’t have one anymore.
May 1st, 2008 | #
this is good stuff
May 1st, 2008 | #
i would say very enlightening
May 1st, 2008 | #
very informative. great details
May 1st, 2008 | #
Insurance companies drive me crazy!
May 1st, 2008 | #
That is very good tip. I will start it tomorrow.
May 1st, 2008 | #
Please check out my new addition. Not only did I set my deductible high and save money, I only had to pay $150 of it in the end.
May 2nd, 2008 | #
Helpful information for those who do not have auto insurance.
May 2nd, 2008 | #
Cute editorial makes sense and it’s creative. I agree that I just saved alot of money on my car insurance.
May 2nd, 2008 | #
Great!
May 3rd, 2008 | #
very good, I like this alot.
May 3rd, 2008 | #
I agree, a higher deductable means lower payments thus leading to less money the insurnance company can make off of you. Higher payments makes the shareholders really happyl
May 4th, 2008 | #
Good information
May 4th, 2008 | #
thanks. best tip. ask friends and shop around.. but nice store though
May 4th, 2008 | #
Thanks for the helpful tips on auto insurance!
May 5th, 2008 | #
very good
May 5th, 2008 | #
i thought this was a very informational articvle and this could help a lot of people out and purchising auto insurance
May 5th, 2008 | #
ride a bike.
May 5th, 2008 | #
buy a bike.
May 5th, 2008 | #
This was alright… I dont deal with insurane at all right now though.
May 5th, 2008 | #
new cars are expensive all the way around.
May 6th, 2008 | #
agree
May 6th, 2008 | #
Cool
May 6th, 2008 | #
I would say that the information is insightful…but I would look around some more to see if this supports it.
May 6th, 2008 | #
Good article with great points.
May 6th, 2008 | #
Very cool info
May 6th, 2008 | #
THANK FOR THE INSIGHT
May 6th, 2008 | #
good information
May 6th, 2008 | #
Interesting…
May 6th, 2008 | #
I can dig it
May 6th, 2008 | #
Very helpful article. I strongly agree with it!
May 6th, 2008 | #
umm man that kinda stinks that you crashed your car
and i def know that i need to save my money
May 6th, 2008 | #
I totally agree.
May 6th, 2008 | #
Great info
May 6th, 2008 | #
agree!! kudos
May 6th, 2008 | #
I liked that
May 6th, 2008 | #
cool
May 7th, 2008 | #
that was neet
May 7th, 2008 | #
Cool
May 7th, 2008 | #
Good information. I had to learn the hard way. I had gotten into a fender bender and I have full coverage insurance, my insurance went up and I paid for it out of my own pocket. I don’t understand why because I wasn’t at fault.
May 7th, 2008 | #
Very informative. Since I new to credit this was very interesting info for me to be aware of. Thanks!
May 7th, 2008 | #
Great Info! Thanks.
May 7th, 2008 | #
Good information about inusrance premiums!
May 7th, 2008 | #
that was really interesting
May 7th, 2008 | #
Very informative.
May 7th, 2008 | #
Very helpful.
May 7th, 2008 | #
awesome!
May 7th, 2008 | #
Verrrry! interesting
May 7th, 2008 | #
interesting but long
May 7th, 2008 | #
thanx for the advice, i’ll save it for later…getting my license soon.
May 7th, 2008 | #
interesting information
May 7th, 2008 | #
so in reality the insurance company is there for the love of the money and not as an in case option.
May 7th, 2008 | #
cooleo
May 7th, 2008 | #
Good Article
May 7th, 2008 | #
INTERESTING IT IS!
May 8th, 2008 | #
very good and informational article
May 8th, 2008 | #
Good article. Very helpful info.
May 8th, 2008 | #
very interesting thank you
May 8th, 2008 | #
thankyou.
May 8th, 2008 | #
very informative! We can always benefit from others’ experience.
May 8th, 2008 | #
Yes, I agree. I have a high deductible.
May 9th, 2008 | #
haha smart one…never would of thought of it..
May 9th, 2008 | #
nice
May 9th, 2008 | #