How Much Car Insurance Do You Need 4 EASY STEPS


are you confused about car insurance did
you just select the same kind of
coverage that your parents did because I
don’t know it’s confusing as heck in
this article I’m going to walk you through
the exact steps to figure out how much
car insurance you really need and
spoiler alert you have the potential to
save big money so stick around hey
what’s up it’s just being from debt-free
Millennials and the channel for all
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a debt-free life subscribe to the
channel because today I’m walking
through car insurance
this can be super confusing for a lot of
us and I have to tell you I had four
separate conversations with my students
in budget bootcamp and the freedom
project if you don’t know what those
programs are I will link to them in the
description below but I was talking to
the debt free millennial students and I
was shocked because so many of them were
in my opinion over pain for car
insurance and we had talked about oh
well you know my parents had this for my
car and then when I got the title I just
kind of took the same coverage and while
that may be really easy for you to do
you could actually be throwing a lot of
money down the drain
so let’s talk about how much car
insurance you really need step one you
need to understand the three types of
car insurance coverages available that
includes liability comprehensive and
okay so liability coverage liability
insurance covers any bodily injury or
property damage when you have an
accident that is your fault in other
words if you were to hit somebody your
insurance would cover the cost of the
repairs to that car or if you caused any
harm to the person like physical injury
liability insurance this is the basic
type of insurance that everybody needs
it’s illegal to not have this type of
insurance so make sure you have it
so bodily injury liability think of this
as medical cost property damage
liability think of this as the cost of
the repairs to the car comprehensive
insurance covers any kind of repairs to
your car that did not result from a
collision let’s say your car got broken
into a tree branch fell on top of it
your car caught on fire unexpectedly
from a natural disaster hailstorm came
around any of those things would be
covered by comprehensive insurance and
the last type of insurance number three
is the collision insurance collision
insurance covers the cost of repair for
your vehicle if you are involved in an
accident and it doesn’t matter whose
fault it is whether it is the person who
hit you or you hit somebody else
collision coverage will cover the cost
of repairs to your car your own
liability insurance does not cover the
cost of repairs towards your car unless
the other person is at fault and then
their liability insurance would cover
the cost of your repairs and let’s say
that other person didn’t have enough
liability insurance to cover the cost of
your repairs this is where collision
coverage would help you out one
important thing to note here is if you
have a car loan you may be required to
have full coverage which means all three
types of insurance on your car so while
you may not have the opportunity to pick
and choose the different
types that you want you do have the
option to shop around different
insurance companies to get the best rate
okay step two you need to determine how
much car insurance you need I will say
this it is a really good idea to
maximize your liability coverage now
generally most insurance companies will
max out in three different areas
this would include personal injury total
injuries per accident and property
damage so when you go into your
insurance coverage you can log on to
your account you should see three
different numbers the max generally for
personal injury is $250,000 the total
injuries per accident is $500,000 and
the property damage max is $100,000 now
I wanted to show you guys exactly what
type of insurance I’m carrying with my
2015 Subaru Forester so you can get an
idea but I have maxed out bodily injury
and property damage liability – those
exact numbers – 5500 and 100 so it’s a
good idea for you to max this out if
your numbers don’t match mine and to
give you an idea of how this would
impact your premium I went ahead and
went inside of my insurance coverage and
I did some changes hypothetically to see
how it would impact my rate so from the
drop-down menu and I’m on progressive
right now I could select from the 250
500 100 and let’s say that I just
dropped it down to half that 100 per
person 300 per accident and 50 per
accident and see what that does for my
car insurance premium so you can see it
actually reduces my premium from 215
dollars and this is paid out every six
months to a hundred and ninety seven
dollars for a six month premium so my
premium overall would drop $14 and 78
cents if I switched within my policy
period but if you look at the effect of
the entire six month period because I
car insurance every six months which
we’ll talk about how that saves you
money as well that’s the difference
between 2:15 and 197 and it only changes
my six month premium by $20.00 so let’s
get this straight cutting my liability
in half only saves me $20 for six months
so it only saves me three dollars and 33
cents per month I don’t know about you
but paying just three dollars extra to
literally double my liability I think
that’s a pretty good deal so maximizing
your liability insurance is key
next you’re going to take a look at your
comprehensive coverage it’s pretty
inexpensive to add so I would suggest
including this as well here’s a very
important note about comprehensive and
collision coverage raise your deductible
if you have one thousand dollars in euro
ship fund that’s set aside for
emergencies if you have at least one
thousand dollars in savings raise your
deductible on your comprehensive and
collision coverage and just for kicks
I’m going to show you what happens when
I reduced my deductible from $1,000 to
one hundred dollars okay remember
comprehensive insurance covers any
repairs to your car that did not result
in a collision so these are things like
natural disasters theft that sort of
thing so when I went into progressive
and I changed my comprehensive
deductible from $1,000 to $100 that was
a difference between paying twenty three
dollars two pain seventy six dollars it
actually is a big difference because it
costs me fifty three dollars more the
change raises my premium from three
hundred and eighty dollars every six
months to four hundred and thirty three
dollars so that’s a difference of about
eight dollars and eighty three cents
additional per month or one hundred and
six dollars per year a great way to save
even just a hundred dollars per year in
my case is just raising my deductible
now let’s see how changing the collision
deductible from $1,000 to $100 changes
things okay so this is insane
but when I changed it from a $1,000
deductible for collision coverage which
was one hundred and five dollars for a
six month premium rate dropping it to
one hundred dollars
increased my premium to two hundred and
ninety dollars that’s insane this by far
is the biggest swing impacting my
premium by lowering my car deductible
from $1,000 to one hundred dollars I
effectively increased my premium
basically the money that you pay
towards the car insurance company just
to keep your car protected I went from a
three hundred and eighty dollars for a
six-month period to five hundred and
sixty-five dollars that’s a difference
of three hundred seventy dollars per
year if you do anything if you take away
anything from this video I highly
suggest that you increase your
deductible on your collision insurance
to one thousand dollars so you’re
probably wondering why is that such a
big difference in lowering in a lower
collision deductible than a higher one
well what you are basically telling the
insurance company is that you are
willing to take on less risk if somebody
hits you to pay for that out of pocket
repair costs then the insurance company
and the insurance man be like oh you
don’t want to pay more for the collision
coverage then we’re gonna charge you
more because you are a more risky
customer to us and we’re afraid that
somebody’s gonna hit you and you’re not
willing to pay more upfront
out-of-pocket costs that’s why it’s so
important to have at least $1,000 in
your emergency fund this is the ohshit
fund that I keep talking about because
if you have at least that much money you
have the opportunity to save yourself
some mega bucks on your insurance
okay so step three is to get multiple
quotes from multiple car insurance
companies so you’re going to have to do
a bit of legwork to shop around but now
you know what to look for right
liability you are going to max out in my
case it was 250 500 100 you’re also
going to opt for comprehensive and
collision coverage with a $1,000
deductible in each got it then you’re
going to request and put that out there
to different insurance companies now I
recently used a tool called Gabby that’s
G ABI comm and what I did was I
downloaded my coverage policy from
progressive I uploaded it into Gabi’s
system and I said keep my coverage the
same for you you might opt to change
your coverage to what I listed out and
then they’re going to email you and say
hey these are all the car insurance
company quotes that we selected for you
that could be a good fit and then you
can opt to choose to switch through
Gabby it’s really simple I’m going to
drop my link below so that you can sign
up and see how it goes because I had
already maxed out my liability and my
deductible is for comprehensive and
I actually was told by Gabby that I was
getting a good deal so I didn’t make any
changes and then they’re just going to
keep that on record so that if there was
a new quote from another insurance
company they would be able to notify me
and then I can make a switch you do not
have to be brand loyal to these auto
insurance companies they don’t care they
want your money and what I really like
about this is I’m okay switching so that
I can get the best deal and the best
okay once you get the multiple car
insurance quotes and you’re able to make
some adjustments step four is optimize
your car insurance to get the best rate
now one thing that I really liked about
progressive and I know a lot of other
car insurance companies do this is you
can bundle other insurance policies with
car insurance so with progressive i
bundled my renter’s insurance and auto
insurance into one and we get a slight
bundled discount my other trick to
saving money on car insurance is opt to
pay the six-month premium rate instead
of the monthly rate when you pay the
monthly rate you’re actually paying
slightly more than if you were to pay
the six-month rate in my case my monthly
rate was 72 dollars and my six month
rate was three hundred and eighty
dollars well when you divide the three
hundred and eighty dollars out by six
months it only ends up being sixty three
dollars so that’s a difference of nine
dollars that I’m saving or a hundred and
eight dollars per year and I don’t know
about you but I’d rather save that one
hundred and eight dollars for something
really nice a really quick trick to do
this is simply add in that six-month
premium to your budget and budget out
for it monthly so it still feels like I
am paying my car insurance monthly but
instead of giving it to the insurance
company I’m just setting it aside in my
account and then when that six month is
due I will go back in pull that money
out of my account and pay for it because
I’ve already saved up for it monthly
I want to mention a side note here your
car insurance premium is impacted by
your driving history so if you’ve been
involved in accidents in the past and
recently that could impact your premium
rate so take that as a caveat
fortunately knock on wood my husband and
I have not been involved in an accident
I think since we were married we’re
really safe drivers I have to say also
if you have an older vehicle your car
insurance premium might be a bit higher
that’s because insurance companies seem
to think that older cars are less safe I
don’t know about you but I drove a 2002
Ford Escort zx2 for 1112 years and it
was really safe Kyle had driven a 2003
Jeep Grand Cherokee and what was really
interesting about that is when we moved
to California the insurance premium was
492 dollars for our six month premium
and then when we bought our 2015 Subaru
Forester in cash
our insurance premium dropped from 492
to 380 because it was a newer vehicle
all right
so to recap all this I know I unpacked a
lot of stuff for you but in order to
know exactly what car insurance you need
is remember the three types of car
insurance types liability collision
comprehensive your liability you are
going to max out 250 500 100 your
comprehensive and collision raise your
deductible to $1,000 each you’re going
to get multiple quotes from multiple
companies and make the switch you’re
going to optimize pay the six-month
premium as opposed to the monthly
premium and see how you can bundle other
existing insurance policies drop me a
comment below was this video helpful was
it more confusing I’m going to also link
my blog post so that you can see the
written steps so that you can pull that
up side-by-side as you’re working on
changing your car insurance so that you
can save money I’d love to learn how
you’re saving money with the strategy
and these insta
actions and I’ll catch you in another