Auto Insurance Renewal and How to Trim the Bill

A letter from Liberty Mutual came yesterday, asking us for an update on our vehicles, a car and a van, which are both insured with then under comprehensive coverage. 

It's the time to renew our auto insurance.

I have been with Liberty Mutual for three years and have both auto and home insurance with them. Under the current auto policy, we pay $1516 a year for the two cars and the coverage includes:

• Liability: Bodily Injury: $50K each person, and $100K each accident; Property Damage: $50K each accident
• Uninsured/Underinsured Motorists: Same as above
• Medical Expense Limit: $250K
• Medical Expense Deductible: $1K
• Collision Deductible: $1K; other damage deductible: $1K

Though the total cost isn't that bad considering that New Jersey has notoriously high auto insurance premiums in the nation, I plan to drop the full coverage on the car when renewing the policy. The car, which was purchased new in 2000, has more than 80K miles on it already. For the past six years, the idea of changing coverage never occurred to us, though we switched insurance a couple of times and didn't have any accident (the only claim we filed for the car was four years ago when it was hit by a deer). Since now I only use the car for commute (30 miles round-trip, local driving), the full coverage doesn't seem to be necessary. Under the present policy, the cost for the coverage for damage is $253. Changing to liability only may save us a couple of hundred dollars a year. 

So far I am quite happy with Liberty Mutual and there's no plan to change insurer just yet, but Costco says on its website that members can save as much as 20% on auto and home insurance. I don't know how believable that statement is; it doesn't hurt to give them a call to find out their rate.

Speaking of trimming the auto insurance bill, if you can’t change your ZIP code or build a garage for your car, you may find the following tips helpful:

• It pays to shop around. This is the rule-of-thumb not just for insurance, but for almost everything you shop. However, I will only use online quote as a screener to get an idea of the price range I may be in. Give the insurer a call for a second quote will give you the exact number.
• Buy a safe, reliable car. Yes, the maker and model of your car also have huge impact on your insurance bill. If you buy a low safety rating vehicle that costs a lot to repair, you will see it in your bill. Also, try not to buy those models that are attractive to thefts.
• Set a higher deductible. Don’t settle with $250 or $500 deductibles if you really want to save. As you can see, I $1000 deductibles for both the demage and medical expense. From my experience, I found this could be the single most effective ways to cut my insurance bill. Get quotes for $250, $500, and $1000 deductibles and you will see the difference when other selections remain the same. And with higher deductible, you may drive more carefully.
• Buy home and car insurances from one insurer. This way you can enjoy discounts for multiple policies.

Finally, you don't need a comprehensive coverage if your car is only worth several thousand of dollars, as what I want to do for my car.

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