Dave Ramsey is a self-proclaimed "car guru", and he definitely knows his stuff when it comes to buying car insurance. So, what is Dave's take on car safety in the United States? In this article, we take a look at Dave's top five tips for better car safety in the USA.
First, Dave recommends that you invest in an emergency fund. An emergency fund is basically a savings account where you deposit money into whenever you need it - be it for medical expenses, a down payment on a house, or to set up some sort of accident coverage. Emergency fund savings should be a part of your overall car safety plan; otherwise, they won't really help with your goal of getting cheap or affordable car insurance premiums.
Second, one of Dave's best ramseys - and I mean his top five things like his "4-step process" are to find low-cost car liability insurance that has the maximum deductible. You know, that deductible that you're going to want to have to pay as soon as the accident happens. When you're looking for a good low-cost provider, it's important to compare many offers. Make sure that you don't sacrifice the coverage that you actually need just to save a few dollars. This may not be something that you necessarily think of, but the truth is that there are many cases when people don't actually have enough money in their emergency funds to cover the costs of major personal injuries.
Third, Dave has another Dave Ramsey car insurance advice that you should take note of: drive carefully. Insurance rates are based on risk. The more risk that an insurer sees in a driver, the higher the premium. So it really makes sense to drive safely.
The last date advice that we're going to go over today is about his "4-step process" to find the lowest car liability insurance rate. In this process, he divides the cost of auto insurance in to four categories: deductible, premium, total coverage, and out-of-pocket max. By dividing the cost of insurance by these four categories, he hopes to find the absolute lowest rate available to drivers. To Dave's surprise, however, a majority of drivers never even come close to reaching the absolute lowest price!
So what is the reason behind this? It's simple - every person driving on the road is unique. One insurance company might be very aggressive with their premiums, while your neighbor might be stingy. What this means is that your "true" true deductible, which is the amount of money that you'll be personally liable for if you get into an accident, won't always be the same at all.
Here's a quick review of some of the things like your age, whether or not you have any traffic tickets or accidents on your record, etc. You can't change things like your age or driving record. But you can certainly change things like your deductibles and the amount of coverage that you want. The deductible is the amount that you agree to pay in the event of a claim. It is NOT the amount of money that the insurance company will pay to you; it is only the set up costs.
The final Dave Ramsey car insurance recommendation that we're going to go over today is about setting up an emergency fund. If you do not have any money saved up to use as an emergency fund, then you need to open up a separate account just for this purpose. When you set this up you will be taking a little bit of the risk out of your car buying experience by being more careful with your credit card purchases. An emergency fund should only be used when you really need it, and you've done everything that you can to avoid having to use it. By following this advice you can be sure that you are protecting yourself, and that you are getting the best possible coverage.