Save Money on Your Car Insurance
Disclaimer: Views and opinions expressed in Bob’s Blog are solely those of the author and do not purport to reflect the views and opinions of the Office on Aging or its staff. Posted 11/20/2024
There is a serious traffic problem here in Knoxville and Knox County.
At almost any time during the hours of 8 to 6, there is bumper to bumper traffic on Interstate 40 and 75 in West Knox County and through Knoxville and east Knox County on Interstate 40.
Between the hours of 7:30 and 9:00 am and 4:00 and 6:30 pm, many of the local roads are jammed with people going to and from work.
There always have been distracted drivers. It has been made worse by cell phones. Some people are distracted by the conversations they are having on their phones. They are not paying close attention to how they are driving.
Traffic Congestion and Distracted Driving = More Accidents
This congestion on the roads and distracted driving leads to traffic accidents. To protect yourself, you need to have car insurance. If you don’t, the consequences can be severe:
First, if you are making payments on your car, technically the finance company owns it. The company requires you to have insurance. That is to protect their interests if you have an accident. They will have your car repossessed if there is no insurance.
Second, if you are not making payments and own the car outright, it can cost you a lot if you are at fault in an accident and don’t have money to pay the medical, repair and other costs incurred by the other party in the accident.
Third, the state of Tennessee requires a car owner to have liability coverage. This will cover the expenses of the other party if you are at fault in a car accident. If you don’t have coverage, you can be fined, have your driver’s license suspended and even face imprisonment.
The Cost of Car Insurance
Many people don’t realize it, but the cost of insurance varies quite a bit. There are many different factors.
- Premiums can vary based on where you live. Insurance Companies charge more if there are a higher number of accidents in your zip code or the area of town you live in. Rates will also be higher if cars are stolen more frequently where you live than they are in other areas.
- If you have more accidents than another person, your insurance will cost more.
- Another factor in determining the cost of insurance for you is your credit score. Rates are lowest for those with good credit. They are higher for those with poor credit.
- If you have had many accidents or tickets and a bad credit score, it may be difficult for you to get insurance at all.
- The next factor is age. Auto insurance costs more for people under 25 and those 65 and older than for those at other ages.
Those 65 and older pay more because they can have more accidents. There are several reasons:
- They may have poorer vision, hearing, and reflexes.
- They may be more susceptible to more serious injuries which can lead to higher cost of medical treatment.
- Their driving skills may decline and increase their risk of accidents.
Another thing people don’t realize is that age plays a factor in the cost. Rates start to increase when a person reaches age 65. Insurance rates peak when they reach 75. After that they start to drop and are lower at 85 and 90.
After people retire, the number of miles they drive yearly starts to drop. The main reason is they are no longer driving to work. Here in Knoxville, a 65 year old drives an average of about 12,000 miles a year. At 75, that is down to about 9,000 miles a year. At 85, they are driving about 6,000 miles annually.
Do older people have to settle for the fact that they’re going to be paying more for car insurance or are there steps they can take to reduce the cost?
The answer is yes.
Steps to Take to Reduce the Cost of Your Car Insurance.
First, check your credit score. If it is low, work on increasing it. This is going to be a slow process but well worth it. You can find out more about the steps you can take to improve your score by going to Google Gemini or Microsoft Copilot and typing in “How can I improve my credit score?”
Second, take a defensive driving course. Typically, you can expect to save about 10% annually. Many different organizations offer these courses. Here are 3.
1. AARP has a Smart Driver Course. This course is 8 hours long. You can either take this course in-person or online.
If you want to take it in-person, several different senior centers locally offer it. Three of the senior centers offer it in 4 hour segments on 2 days. It is offered at the John T O’Connor Center over 8 hours on one day.
It is also offered fairly regularly at the Seymour Heights Christian Church in 4 hour segments on 2 consecutive days or over 8 hours on one day.
There is a fee for this course.
To find where they are being offered, please click on this link – https://local.aarp.org/driver-safety/aarp-smart-driver-knoxville-tn-c32438.html.
If you would prefer to take this course at home on your computer, you can do so by registering here – https://payments.aarpdriversafety.org/checkout?productId=CqvwNMoj9NacaPpE.
2. AAA has a RoadWise Driver course. They offer this course online. The charge for this course is $21.95. You can register for it by clicking here.
3. DriveSafe Online also offers a defensive driving course. To check that out please click here.
Before registering for a course, make sure to check with your insurance company to find out
- if they accept the course offered by this company
- how much of a discount you will get by taking the course, and
for how many years you will continue to get this discount.
Different insurance companies typically have a limit on the number of years they will give you the discount for taking a safe driving course. At the end of that time, you may have to take the course again to continue to get the discount.
Third, figure out how much insurance you actually need. If you have a newer vehicle, you will want to have full coverage to protect you and your car if you have an accident. If your car is old, you may want to get less. The minimum amount of coverage a car owner needs to carry according to Tennessee law is:
- $25,000 for each injury or death for each accident
- $50,000 for all injuries or deaths for each accident
- $25,000 for property damage for each accident.
A word of caution – if you decide to only carry the minimum amounts of coverage and the cost of medical care and car repairs from an accident exceed what your insurance pays, you can be held liable for the balance of the charges. This can be very expensive for you.
Fourth, contact several different insurance companies and ask them for a quote on how much your annual insurance premium would be if you got a policy through them. Premiums can vary significantly from company to company.
Fifth, if you own your own home or have several cars, look at getting the insurance on all of them from the same insurance company. You may be able to save money doing this.
Once you find an insurance company that’s right for you, regularly check to see if they still have the lowest premium. Insurance companies frequently offer a lower rate to get a person’s business and then increase the rates over the subsequent years. You don’t want to have to pay more than you have to.
Just Remember – There’s No Cost to Shop Around
Any time prices go up, the impact on your wallet is immediate. When they go up on expensive items like car insurance, the hurt is greater. Always be looking around for ways to pay less and keep more of what you have.
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If you have any comments on what you have read here, I’d like to hear them. So, please email them to me. Also – if you have any ideas about subjects you would like to see discussed in future posts, please send me an email and let me know. My email address is bob.ooablog@gmail.com.