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How can I save money?
The price you pay
for your auto insurance can vary by hundreds of dollars, depending what
type of car you have and the insurance company you buy your policy
from. Here are some ways to save money.
Shop
around
Prices vary from company to company, so it pays to
shop around. Get at least three price quotes. You can call companies
directly or access information on the Internet. Your state insurance
department may also provide comparisons of prices charged by major
insurers.
Get quotes from different types of insurance companies. Some sell
through their own agents. These agencies have the same name as the
insurance company. Some sell through independent agents who offer
policies from several insurance companies. Other companies sell
directly to consumers over the phone or via the Internet.
But don't shop by price alone. You want a company that answers your
questions and handles claims fairly and efficiently. Ask friends and
relatives for their recommendations. Contact your state insurance department
to find out whether they make available consumer complaint ratios by
company.
You can also check the financial health of insurance companies through independent rating companies
and by consulting consumer magazines.
Select an agent or company representative who takes the time to answer
your questions. Remember, you'll be dealing with this company if you
have an accident or other emergency.
Before you buy a car, compare insurance costs
Before you buy a new or used car, check into insurance
costs. Your premium is based in part on the car’s sticker price, the
cost to repair it, its overall safety record, and the likelihood of
theft. Many insurers offer discounts for features that reduce the risk
of injuries or theft. These include air bags, anti-lock brakes, daytime
running lights and anti-theft devices. Some states require insurers to
give discounts for cars equipped with air bags or anti-lock brakes.
Cars that are favorite targets for thieves cost more to insure.
Information that can help you decide what car to buy is available from
the Insurance Institute for Highway Safety ( http://www.iihs.org ).
Ask for higher deductibles
Deductibles represent the amount of money you pay
before your insurance policy kicks in. By requesting higher
deductibles, you can lower your costs substantially. For example,
increasing your deductible from $200 to $500 could reduce your
collision and comprehensive coverage cost by 15 percent to 30 percent.
Going to a $1,000 deductible can save you 40 percent or more.
Reduce coverage on older cars
Consider dropping collision and/or comprehensive
coverages on older cars. It may not be cost-effective to continue
insuring cars worth less than 10 times the amount you would pay for
coverage. Any claim payment you receive would not substantially exceed
your premiums minus the deductible. Claims occur on average only once
every 11 or 12 years. Auto dealers and banks can tell you the worth of
a car, or you can look it up online at Kelley Blue Book ( http://www.kbb.com
).
Review your coverage at renewal time to make sure your insurance needs
haven’t changed.
Buy your homeowners and auto coverage from the same
insurer
Many insurers will give you a discount if you buy two
or more types of insurance from them. Also you may get a reduction if
you have more than one vehicle insured with the same company. Some
insurers reduce premiums for long-time customers. But shop around; you
may save money buying from different insurance companies despite the
multi-policy discount.
Take advantage of low-mileage discounts
Some companies offer discounts to motorists who drive
a lower than average number of miles per year. Low mileage discounts
can also apply to drivers who carpool to work.
Ask about group insurance
Some companies offer reductions to drivers who get
insurance through a group plan from their employers, or through
professional, business and alumni groups and other associations. Ask
your employer or any groups or clubs to which you belong.
Maintain good credit
Your credit rating may affect what you pay for
insurance, so keep a close eye on it. Credit makes insurance rates more
accurate, fair and objective. While the use of insurance scoring varies
from state to state and company to company, it is a fact that drivers
with long, stable credit records have fewer accidents than drivers who
don't. There are various Internet services that allow you to check your
credit rating and provide tips on how to improve your score.
Seek out safe driver discounts
Companies offer discounts to policyholders who have
not had any accidents or moving violations for a number of years. You
may also qualify for a cut if you have recently taken a defensive
driving course.
Inquire about other discounts
You may get a break on your insurance if you are over
50 or in some cases 55 and retired or if there is a young driver on the
policy who is a good student, has taken a drivers education course or
is at a college, generally at least 100 miles away.
When you comparison shop, inquire about discounts* for:
- $500 deductible
- $1,000 deductible
- More than 1 car
- No accidents in 3 years
- No moving violations in 3 years
- Drivers over 50-55 years of age
- Driver training course
- Defensive driving course
- Anti-theft device
- Low annual mileage
- Air bag
- Anti-lock brakes
- Daytime running lights
- Student drivers with good grades
- Auto and homeowners coverage with
the same company
- College students away from home
- Long-time customer
- Other discounts
*The discounts listed may not be available in all states or from all
insurance companies.
But don’t forget that the key to savings is not the discounts but the
final price. A company that offers few discounts may still have a lower
overall price.
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© Insurance Information Institute, Inc. - ALL
RIGHTS RESERVED -
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