A uto insurance rates are increasing as companies raise premiums to compensate for losses in their investment portfolios. Surprisingly, you often can save when companies change their premium policies. Even if you secured a good rate in recent years, you might find a better one now.
SHOP AROUND
Shop for new quotes any time you buy a car, add a driver to your policy, change your commute or move to a new home.
Collect quotes for your specific circumstances from at least three companies. Have this information on hand when checking with insurers...
Copy of your current policy
Driving histories for each driver you insure
Your claims history
Vehicle identification number, make and model for each vehicle you insure
Compare prices at...
Compare the quotes you receive with the premium comparisons posted by many state departments of insurance. For links to their Web sites, go to the National Association of Insurance Commissioners Web site, www.naic.org.
You might save with insurers that sell directly to customers, such as Amica (www.amica.com)... or Geico (www.geico.com).
Caution: Price quotes typically are for married couples with clean driving records. Companies that offer the lowest rates for couples may have the highest rates for teenagers or people with blemished records.
Helpful: After gathering quotes, check the complaint histories of the companies you're considering. On their Web sites, many state departments of insurance rank companies based on how many complaints consumers file against them. Also check www.insure.com/complaints.
Ask your current agent if he/she can match your new quote.
CUT COSTS
Once you decide on an insurer, you can further reduce your premium by...
Increasing deductibles. If a $1,000 loss won't set you back too much, get a policy with a $1,000 deductible -- or an even higher one if you can afford it and your insurer allows it. Increasing a $100 deductible to $1,000 could reduce your total insurance premium by 25%.
Requesting specific discounts. They typically are available if you...
Have had a clean driving record for at least the past three years.
Drive less than a certain number of miles per year. Companies use their own formulas, and mileage is just one variable.
Insure more than one vehicle.
Buy homeowner's and other insurance through the same company.
Are a nonsmoker. Some insurance companies consider smoking an indicator of other risky behavior.
Make your car harder to steal -- by parking in a garage or adding antitheft devices.
Have completed a defensive driving course.
Earn good grades, if you are a student.
Keeping a clean credit record. More companies are charging higher premiums for people with poor credit histories. Federal law generally allows this practice, but some states have placed limits on how insurance companies can use credit histories.
Helpful: If you are turned down for insurance or are told that your premiums are going up because of your credit report, you have the right to review the report. Report any mistakes to the insurance company and credit bureaus... and ask that corrections be made.
MORE WAYS TO REDUCE PREMIUMS
Drop collision coverage. You may not need it if the annual cost is more than 6% of the car's value. Dropping collision can save you more than 25%.
Drop roadside assistance if you belong to an auto club, such as AAA, or your car's manufacturer or lessor offers it. Eliminating it can save you more than $25 per year.
Drop rental reimbursement coverage. You probably don't need it if you have a second car. This might save you $40 or more each year.
Check insurance rates before buying a new car. Some cost less to insure than others. Premiums are higher for those that are stolen often, more costly to repair and/or easier to damage.
Example: The typical insurance bill for a Ford Explorer is likely to be 7% to 10% higher than that for a Ford Taurus.
File claims judiciously. Before filing a claim, ask your agent how it will affect your premiums. Being involved in an accident, particularly one for which you may be responsible, may raise your rates by 20% or more.
LIABILITY COVERAGE
Buy an umbrella personal liability policy to protect your home, savings, other assets and future income in the event that claims against you exceed your auto liability limit. Premiums are usually $200 to $300 a year for $1 million in coverage for a family that has the legally required level of auto and homeowner's liability coverage.
