Kevin McCormally: I am Kevin McCormally of Kiplinger's. I am here with Kim Lankford Insurance Editor of Kiplinger's Personal Finance magazine, to talk about Auto Insurance at different stages of your life. Kim, we know that the young adults want the great things in their life as when they buy their first car, one of the nightmares that arrives is when we start buying insurance for that car. What can a young person do?
Kimberly Lankford: Well a young person, first of all one of the biggest parts of their monthly budget is going to be their Auto Insurance cost. So anything they can do that lower cost for make a big difference. First of all look for a safe car, it can lower your cost, shop around because this is the first time you really having your own coverage that can be a huge price range from company to company. Now is your credit score, your credit score plays a large role in your insurance costs and better credit score you can have the better rate you can have.
Kevin McCormally: Of course one of most important thing is to have birthdays because something happens at age 25?
Kimberly Lankford: A 25 you may see a rate drop significantly just because you are turning 25, and that's a good day just hold on until then.
Kevin McCormally: It's going to happen automatically?
Kimberly Lankford: It may happen automatically, it really varies from company to company. So when you turn 25 it's also a good time to look around, shop around and see if you can get a better deal with another company because some do give you a bigger, bigger price trap when you turn 25.
Kevin McCormally: But Kim what about getting married is that going to affect young person's Auto Insurance premiums?
Kimberly Lankford: Getting married you can do about the same type of thing is at age 25 and there is also a good time to shop around again just make sure if you're company is giving you a best deal for the young married couple or if they're someone else, they get you a better rate.
Kevin McCormally: Okay, I think probably the next stage in life is when your own children turn 16 and this is a time that their parents just go crazy with increasing cost what happens?
Kimberly Lankford: That is another big, big surprise for people. I mean your rates can double when you start having teenage drivers on then. And a good thing to do at that point is to take advantage of all the discounts you can possibly get. If you have your home owner's insurance and maybe an Umbrella policy and all of your cars with one insurance, you are going to get a discount on every single policy and that can really add up.
Kevin McCormally: And of course the kid's grades can actually help too. If they get good grades in school they'll cost you less to insurance to car.
Kimberly Lankford: It is really important to increase your children. The year before they start driving to keep those grades high because if you get a B average or higher you can get a big discount which can really save your lot of money.
Kevin McCormally: Finally Kim, as the cars get older and you are driving a car that's not worth a lot of money should you drop some of your coverage.
Kimberly Lankford: That's a great time to look at whether you could drop your collision and comprehensive. Take a look at Kelley Blue Book www.kbb.com to find out what your car is worth and if it's not worth much more than your deductible then you might as well, just think about dropping your collision and comprehensive coverage and you can easily look on your insurance policy see how much money you've saved right away.
Kevin McCormally: Okay, so it's right on the policy exactly what the pay back would be for dropping that insurance.
Kimberly Lankford: Exactly, it's itemized for each type of coverage. You can just subtract those numbers and see how much you save.
Kevin McCormally: Okay, thank you Kim.
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