Review your Auto Insurance Policy at Renewal: How to Save Money When you Renew Coverage

Whether we like it or not, reviewing our auto policies at every renewal is an important way to prevent problems later on if there’s a claim. Doing this might also help save money on premiums.

To many people, auto insurance is nothing more than an inconvenience; something to be avoided if at all possible. It’s fair to say that many drivers choose to concern them-selves  with auto insurance only when they’re required to by law or by their State’s  Motor Vehicle Department. While auto insurance may not be particularly sexy, it’s a part of living in the United States that we can’t avoid if we choose to operate a motor vehicle in public. Having some knowledge of auto insurance, particularly your own auto insurance, may mean the difference between being protected and exposing yourself to risks which are often expensive and unnecessary. Review your policy at each renewal, preferably with your agent, in order to prevent unhappy surprises later on.

One important reason to review your auto coverage’s at each renewal has to do with how you and your family are currently being rated by your insurance company. There’s a difference between how you’re being rated and how you should be rated. Insurance companies try to match the risk they’re taking with the right amount of money they’ll charge you to insure you and your household. When you purchase the policy, the company will assess these risks and charge you appropriately. Sometimes these risks can change with changes you’re experiencing in life. For example, if a customer purchases the policy while their kids are still living at home and driving the cars, the insurance company will charge you for this exposure. When (and if) the kids move out and obtain their own insurance, they’re no longer considered to be a risk in the household and your auto policies should reflect this change. Often times, people aren’t aware of this and they continue to pay for risks that are no longer present.

Another reason to review your coverage’s pertains to vehicle usage. Insurance companies often develop a rate that’s partially based on how much the car is being driven. If you purchase the policy while you’re commuting 250 miles per week, it’s likely that you’re being charged a higher premium for this exposure. If you experience life changes, such as a new career, loss of job, retirement etcetera, it’s possible that you’re eligible for a lower rate that reflects reduced miles being driven. If you don’t know what you’re paying for, you might just keep paying it unnecessarily.

Reviewing your collision and comprehensive coverage’s can, potentially, save you money if you’re driving an older car. As cars get older, and their value depreciates, if there were to be a claim, such as a total loss, the amount of money your insurance company would pay you might not be enough to justify the amount you’re paying for these coverage’s year after year. By reviewing your policy, and doing some research on the price of similar used cars in your area, you can make an informed decision as to whether or not it’s worth it to keep these optional coverage’s. Many people continue to drive older cars with collision and comprehensive coverage’s when it may have made more sense to eliminate these coverage’s years ago to save money.

Another reason for a review has to do with knowing what coverage’s you don’t have on your car. Some people don’t realize what their policy will and will not cover; they often make assumptions which are incorrect and, come claim time, people are often disappointed that they will have to pay out of pocket for such things as a rental car, auto glass or a tow. When you’re buying the policy originally, you may choose to not take some optional coverage’s, such as comprehensive, collision, car rental reimbursement, emergency roadside service, etcetera; for whatever reason. If there are life changes, the need for different insurance coverage’s can also change. For instance, people often don’t choose car rental reimbursement when they buy their auto policy if they have multiple cars in the household. If these extra vehicles are sold, and you’re down to one vehicle in the house, you won’t be covered for a rental car if there’s a covered claim.

The best way to ensure smooth claims-handling and make sure you’re not paying for something you shouldn’t be is to review your policy on a regular basis, preferably with your agent. If you don’t do this it’s often difficult to know what sort of changes need to be made to your policy and, it’s possible, that you’re paying too much for auto insurance.