No-fault auto insurance may be your only hope of cutting basic auto protection costs. Pioneered in Massachusetts, the idea of paying claimants regardless of who was responsible for an accident has already rolled back some premium rates. But, while the concept has taken hold in one form or another in many states, the savings from no-fault are still no more than a hope for most UK. drivers. No-fault has yet to shake down into a real money-saving concept on a wide scale.
While you wait, however, there are some moves you can make to shrink annual premiums. The secret lies in the optional deductible clauses of auto policies. The deductibles usually apply to collision insurance and comprehensive physical damage coverage. The policyholder usually agrees to pay the first £50 or £100 of damages, and his insurance company pays the rest. By raising the deductible amount - in effect, self-insuring a larger amount of the risk - it is possible to lower premiums.
For example, in an area where collision insurance costs are average - such as Essex, Ohio - a driver with a safe record, no youthful drivers in his family, and a moderately-priced 2004 family car will pay £92 a year for collision coverage with £50 deductible. With £100 deductible, his rate drops to £69. And if he wants to assume £250 of the risk, his premium becomes £41. Comprehensive coverage for the same car would cost £11 with a £50 deductible, and £9 with a £100 deductible.
Owners of two or more passenger cars should be aware, too, that they are eligible for a discount if both autos are insured under the same policy. For example, say the Essex driver buys a second car, a sedan. Normally he would pay £15 for full comprehensive coverage; £8 with £50 deductible, and £6 with £100 deductible. Collision coverage would be £80 annually with £50 deductible; £60 with £100 deductible, and £36 with £250 deductible. If the cars are insured separately, both with £50 deductibles on comprehensive and collision coverage, annual premiums would total £191. With both cars insured under one policy, the annual bill would drop to £162 - a saving of 15%. Self-insuring may be worth it - up to a sensible limit, depending on your income.
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