A Pinch of Practicality Can Save a Lot on Auto Insurance

I’m amazed by the options available to me by my auto insurance company. With wage compensation, death benefits, essential services for household maintenance if I become disabled, and more, I have so many options to choose from that I feel as though I’m walking through a grocery store picking out ingredients for a delicious family meal. Auto insurance is no feast, however, and the costs for this delicious dinner can quickly rise when piling on the trimmings. I don’t need a smorgasbord when it comes to insurance coverage, so when I recently reviewed my policy, I pulled out the carving knife and selected only the choice cuts that I’d need in the event of an accident.

To start, I reviewed and continued to decline wage compensation, death benefits, and essential services. I already receive these benefits from my employer, and anything more would be redundant. The next and biggest decision was whether to keep comprehensive and collision coverage or switch to liability only to save money. A loan on my late model vehicle prevented me from reducing its coverage, but my other vehicle is a few years older with a $2,300 blue book value. The cost savings by switching to liability is $24.19 per month or $290.28 per year with a $500 deductible. Divide the yearly cost by the actual benefit of $1,800, and I’m looking at paying over 16% of the value of the vehicle per year to maintain coverage if its value remained fixed, which wasn’t likely. The return, for me, wasn’t worth the current expense, so I switched to liability only. As for the deductible on my late model vehicle, I asked myself how much I thought I could afford to pay to get it back on the road if it needed to be repaired. The lower the deductible the higher my insurance rate would be, but the less my out of pocket expenses would be after an accident. I opted for a $500 deductible. It was low enough to avoid most of the repair expenses, but high enough to keep my rate as affordable as possible.

Auto policies are similar to being on a diet. We all have to eat, but do we really need what we’re eating or is there a more sensible alternative? I went on a diet at my last insurance banquet, and because I did, I now have more room for dessert.


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