Consider part-time insurance for cars you don't use

Consider part-time insurance for cars you don't use »Play Video
By now, most people looking for ways to save money in this recession are running out of ideas. But many of you may be overlooking a hidden savings in your car insurance.

For a number of reasons, many households have cut back on driving. They have cars and trucks they rarely drive, but they're still paying full insurance.

That's hundreds of dollars that could be going somewhere else.

Lisa and Jeremey Brown shared this tip when I met them recently at Consumer Counseling Northwest. They're working with the non-profit debt counselor to reduce their interest rates, pay off their bills and get back on track.

In the process, they found a way to save money that most people don't consider.

"We have several cars and all of them were being insured at the same time but many of them we don't drive." said Jeremey.

So they put the unused cars on standby. Most insurance companies will let you periodically removed a vehicle from your policy if it's not going to be driven for a period of time.

For example, classic and antique cars, seasonal vehicles, cars owned by military members who get deployed or snowbirds who spend winter months in another city- it could be any car that's not used very frequently.

Jeremey and Lisa had to get approval from their insurance company in advance.

"So when we need to use them we call ahead and let the insurance company know that we're going to be needing to use whatever car, but for the most part they're just on standby."

But you can't just switch coverage at a whim.

Most companies will not let you remove or add a vehicle more than four times per year. Many will require you to maintain comprehensive coverage to cover damage to the vehicle. And whether you can exercise the part-time option is totally at the discretion of your insurance company.

And keep in mind: there can be a downside.

If you don't notify your insurance company that you're driving the car again and get in a crash- the money you saved could end up costing you thousands.

According to the Northwest Insurance Council, that's the biggest risk.

"If you remove a vehicle and forget to put it back on your policy, you could save $300 or $400 in premiums, but get stuck with a claim for tend of thousands of dollars," said council president Karl Newman.

Right now, some companies are exploring "Pay As You Drive" policies, with which you only pay based on the actual miles you drive any vehicle.

That's something else to look in to when you review your coverage.

For more information:

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