How to Cut Your Insurance Costs

How to Cut Your Insurance Costs Best Tips

1. Understand how auto insurance is calculated so you can make decisions that will reduce your premiums. The cost of your auto insurance is based on factors such as your age and driving record; the age, repair record, and cost of the make and model of the car you drive; your credit history; the distance between school and home; and your grades. Some of these things you have no control over, but you can reduce your costs by maximizing the things you can control that affect your rates.
2. If you attend school at least 100 miles from home and you don't take your car with you, make sure you or your parents inform the insurance company. The premiums should go down substantially while you're not using the car on a regular basis.
3. If you own a car, don't ever go without auto insurance. You risk your financial future. Without insurance, you could be sued and forced into bankruptcy, ruining your credit for many years. Even if you drive an old clunker and decide it's not worth covering for collision damage, make sure it's covered for liability.
4. If you belong to a fraternity or sorority, an honor society, or other student organization, let your auto insurance company know. Some insurers offer discounts to members of various clubs and other organizations.
5. Your auto insurance will be dramatically cheaper if you can stay on your parents' policy while in college. Once you're listed as the primary driver on a vehicle, you're considered a higher risk and your premium costs will probably double. Whenever possible, stay on your parents' policy as a secondary driver so you can benefit from the price break that their age provides. Your parents will also receive a discount for having a multi-car policy.
6. If you take a car to school, make sure you notify the insurance company of where the car will be located. If you don't, they may not cover claims for theft or damage.
7. You can save money by getting on the Dean's List. Ask your insurance company if they offer a "good student" discount on auto insurance.
8. Ask your parents to call their insurance agent to make sure your stuff will be covered while you're at school, especially any computer or electronic equipment you take with you. These items are often targets of thieves and are easily stolen (especially laptop computers and other electronic equipment).
9. Don't buy insurance you don't need. This includes credit insurance, the collision damage waiver on car rentals (check to make sure your auto insurance includes this coverage), flight insurance, and extended warranties.
10. Don't fall for sales pitches for credit card loss protection insurance. The law already protects you from fraudulent use of your credit card if it's lost or stolen. Buying this "insurance" is throwing away your money.
11. Don't "go bare" (we're not talking about skinny dipping here). Going bare means not being covered by insurance--in this case, health insurance. If you have a serious illness or accident, it could wipe out not only your own finances, but also your family's if they have to pay your medical bills.
12. If at all possible, stay on your parents' health insurance policy through graduation from college. Most policies allow dependent students enrolled full-time (at least twelve credits per semester) at an accredited college to be covered under their parents' policy until the age of twentythree. You may have to show proof of enrollment as a full-time student once a year.
13. If your parents' health insurance coverage is a managed care program, like an HMO, which requires you to use medical providers in a local network, you may not be able to benefit from their plan. It will make sense to continue your coverage only if your college is close enough to your parents' home to enable you to return there when you need medical care.
14. If you can't continue to be covered under your parents' health insurance policy, check into the school's health insurance programs. The coverage may not be great, but it's usually relatively inexpensive, and you should never be without any coverage at all. Being young and healthy doesn't guarantee you won't need medical care, and uninsured medical costs can force you into bankruptcy.
15. If you're in a fraternity or sorority, you may be eligible for group health insurance coverage provided by your national chapter at a reasonable rate. Contact the national headquarters for details.
16. When you borrow money for a car or other large purchase, or sign up for a credit card, you may be offered a payment protection plan, or credit insurance, which claims to cover your payments if you become disabled or unemployed. Most of these plans actually pay only your minimum payment, which isn't enough to pay down your balance and barely covers your interest costs. These plans are just another moneymaking tool for credit card companies and a waste of your money.