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You can do a few things that will go a long way in reducing how much you pay as your car insurance premium. In this article I'll dwell on one that has to do with your car's age, current value and fair market value at the point of making a claim.
If you have an old car (This does not refer to classics -- Just plain old cars) then make sure you do not take either a collision or comprehensive cover for it. It won't be worth it one bit. Here's why...
Like all things in insurance, your premium is calculated based on the value of your car at the time of purchase. However, if you file a claim, your compensation will be based on its fair market value. Furthermore, cars have groupings that determine how much you'll be billed as premium. So let's say your car was worth $20,000 at the time of purchase. If by the time you file a claim its fair market value is $3,000, that, and not the purchase value will be the basis of calculating your compensation.
And, if your car unfortunately belongs to a grouping of cars that are very expensive to insure, your premium will shoot through the roof. You guessed right: Your compensation if you file a claim will still be based on its current market value.
If you decide to lower your premium by increasing your deductible (That is the amount you must pay before an insurance company pays its part), then you'll end up paying a high deductible thereby further lowering what your insurance company will compensate you.
So who gains in this scenario? It’s certainly not you but your car insurance company. Am I trying to run down insurance companies? NO! This is standard practice. However, I an ensuring you understand where your bread is better buttered.