Premium Performance

Your financial advisorGive your vehicle the coverage it deserves

In our continued quest to give you tangible tips on making the most of your hard-earned dollars, BLACK ENTERPRISE begins a new series on auto coverage. We’ll show you how to shop around and tell you what to look for.

You can say this much for the folks in the auto insurance industry: they always find a way to boost a policyholder’s premium. If you’re a staid, middle-aged family man leading a quiet life in an exclusive suburb, they’ll stick you by labeling your conservative sedan a “high risk” car. A grandmother who drives only to church on Sundays will get nabbed for living in a rough part of town. And if you’re the average driver with a few tickets, they’ve got you on your record.

But don’t despair. Here’s some advice on ways to slash your premium immediately, by as much as 20%. You’ll be pleasantly surprised to find that, in most cases, all you need to know is what discounts to ask for and what you can press your agent to do for you.

Get credit on safety features. Be sure to tell insurers about all the extras that make your car safer to drive–and in their eves, less likely to cause an accident. If you have air bags, you qualify for a 20%-50% discount on the medical and personal injury part of your coverage. Automatic safety belts can get you a 10%-30% discount.

Some states, like Florida, New Jersey and New York, require insurers to discount drivers with anti-lock brakes, but drivers elsewhere may also reap benefits. Ask about such amenities as car alarms, hood-and-wheel locking devices and window identification systems. Also check out visibility features, like daytime running lights.

Raise your deductible. You probably already know that the deductible in your policy is the amount you’re willing to pay before your insurer forks over any money. Raising your deductible, even by just a small amount, can make a big difference in your premium.

Boosting your deductible from $200 to $500 can garner you a 15%-30% savings on both collision and comprehensive coverage, says Jeanne Salvatore of the Insurance Information Institute. In fact, when we called around we found that a female driver with a dean driving record could figure to spend $350 over a six-month period with a $100 deductible. By increasing it to $500, she’d shell out only $290 during the same period and save over $120 on the comprehensive and collision portions of her bill annually.

Drop collision and comprehensive coverages. Collision coverage pays for damages caused to your vehicle and can be the most expensive part of your policy. Damages to your car caused by fire, theft, vandalism and natural disasters are covered under comprehensive coverages. But if your car is worth less than $1,000, there’s really no need to carry either, says Salvatore. That’s because if any major damage costs more to fix than the value of your car, your insurer simply won’t pay to repair or replace it. Ask your insurer how much they’d pay and also

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