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[How
to Save on Auto Insurance - Video]
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. Sites like this make it easy to get
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 |
