Ways to Lower Your Insurance

If you're shopping for car insurance, you know there are certain crucial factors influencing your rate that are out of your hands. Such factors include your age, gender and record of prior claims.

Despite this, there's a lot you can do to score a lower rate, and your choices bear more power than you might think. Here are 10 tips guaranteed to help you get the best rate possible on your auto insurance.

1. Get more than one rate quote before you commit. "Company prices are very different, and it pays to shop around. You can easily wind up paying double from one company to the next," says J. Robert Hunter, director of insurance with the Consumer Federation of America, a national watchdog group.
   
   Want to get a sense of who the low-priced carriers are? The National Association of Insurance Carriers offers a map on its Web site that lists each state's regulators. Click on your state and you're taken to the state's Department of Insurance Web site. Its consumer buying guide compares insurance premiums across a range of companies. You'll also learn how many complaints each company has logged. Surprisingly, you don't have to sacrifice service quality to score a low premium. "A lot of the lower-priced companies have the best service rates," says Hunter.
   
   
   


2. Go high on deductibles. If you're willing to give a little with your deductible, you can wind up saving big on your rates. "If you go from a $250 to a $1,000 deductible, you can save between 25 and 40 percent on your policy," says Hunter. You can then set aside a portion of these funds to cover your costs in the event of a claim.
   
   
3. Nix collision and/or comprehensive coverage on older cars. If your older car has comp and collision coverage, you might find yourself paying more in insurance than the car is worth. "Take your comp and collision premium and add it up, then multiply it by 10. If your car is worth less than that, don't buy the coverage," says Hunter. If you're worried about being left overexposed, consider this: The typical policyholder makes a claim only once every 11 years, and reports a total loss only once every 50 years.
   
   
4. Mind your credit score. An increasing number of carriers are considering credit scores when making rate calculations. "Your credit score can be very important in determining your rate," says Hunter. "You can wind up paying up to 50 percent more if you have a bad credit score." Keep your credit score in tip-top shape by paying bills in a timely manner and by regularly checking that there are no items on your history that do not belong to you.
   
   
5. Ask about low-mileage discounts. Many carriers offer discounts to policyholders whose annual mileage is lower than the norm. Maybe you have a short commute. Or maybe your participation in the office vanpool results in fewer hours spent in your daily driver. Whatever the case, your low mileage can score you a reduced rate with some companies, so be sure to inquire about available discounts.
   
   
6. Ask about group insurance discounts. Oftentimes, insurance companies offer discounts to policyholders who are members of certain organizations or professions, such as veterans, engineers or teachers. Request a list of these groups from your carrier to see if you qualify - you might be pleasantly surprised.
   
   
7. Ask about all other discounts. Some carriers offer discounts to policyholders whose vehicles bear certain safety features, like anti-theft devices or motorized seatbelts. Others give reduced rates to senior citizens, and to students whose grades meet certain requirements. "Many carriers offer discounts. Ask for them when you're shopping," says Hunter.
   
   
   
   
8. Avoid lapses in coverage. Even a brief lapse in coverage can disqualify you from receiving discounts. "They use lapses in coverage to increase your premium," says Hunter. Pay your insurance bills on time. And if you're switching carriers, make sure not to quit your previous carrier until the new coverage takes effect.
   
   
9. Think twice about paying in installments. Most carriers charge an administration fee to pay in installments. One carrier surveyed levied a $10 charge per installment to those who opted to break up their bill. The solution? Pay your premium up front, if at all possible.
   
   Of course, this charge is more significant for those with small premiums. If you've got a king-sized premium and feel you'd get a better rate of return by investing your funds elsewhere instead of paying up front, then the installment route will probably best suit your needs.

What About GAP Protection?

Just when you thought you knew everything about insurance - along comes gap protection.

Though it may sound trivial, but if you made a small down payment when buying a car, a gap policy can be lifesaver as well. But first, let's look at why it exists.

As the name implies, gap protection covers what traditional auto insurance doesn't. In other words, it closes the gap between what your insurance company pays if your car is stolen or totaled and what you owe the finance company.

Let's take a test case. Say you bought your car two months ago for $25,000. You begin making payments at about $500 a month based on a 6 percent interest rate. Then, disaster strikes: a tree falls on your car and flattens it.

You call the insurance company and it looks into its crystal ball and decides at the time of the accident your car was worth only $20,000. The car may only be a couple of months old, but it has already lost 20 percent of its value. Unfortunately, the finance company still wants the full amount you owe them. With interest, tax and license fees, they figure that to be $27,000.

Yikes! There's a gap of $7,000 between the $20,000 that the insurance company is willing to pay you and the $27,000 the finance company is demanding. Most folks are going to be eating Spam dinners for the next two years, but if you have gap protection you can safely order steak.

If your car is totaled, or stolen, carefully follow all requirements made by your insurance company. For example, some companies require you to continue making loan payments on your totaled car until the money from the gap insurance is paid out.

Please ask the finance managers about the GAP protection we offer....

What's Covered by a Basic Policy?

Top Five Things to Know Before Buying Auto Insurance

Pay-As-You-Go Auto Insurance... Wouldn't This Be Great For Hawaii!

Insurance Commissioner Steve Poizner of California released regulations permitting and authorizing mileage verification for pay-as-you-drive. The idea being that Californians won't drive as much if they pay-per-mile.

Spokesmen from a few Insurance companies, including State Farm and Allstate, have stated that they are considering pay-per-mile auto insurance but haven't decided whether or not it'll actually become a reality.

With the economy being the way it is, getting a big discount on insurance every month would be very enticing for drivers. Leisure driving may be reduced, and families will be more responsible about grouping trips together and making unnecessary trips. Carpooling would also most likely see an increase. It also might encourage owning multiple vehicles, because families wouldn't be paying for cars that just sit there.

From a consumer perspective, the change makes a lot of sense. From the heavy purse of an insurance provider, however, I'm not sure if this is a change they're hoping for.

Get good grades? Ask your insurance provider about a good student discount

What Factors Affect Your Auto Insurance Rates?

Age

Much of the information insurance companies use to determine rates is based on statistics, and one of the most influential statistics is age. By compiling data collected over a period of several years, insurance companies have calculated which age groups are more likely to be involved in auto accidents. This isn't a factor you have any control over, so just be prepared for higher rates if you fall into a high-risk age group.

Younger drivers are generally considered to be at higher risk for accidents, especially those between the ages of 16 and 23. Statistics show that 16-year-olds driving with passengers are two times as likely to be involved in fatal crashes, and have the highest rate of driver fatalities in the United States. For male drivers within this group, the rate of fatality is even higher-four times the national average.

Until you turn 24, you can expect to pay higher premiums, but you won't get the lowest rates until you reach the 40 to 50 age group. Drivers in that age range have proved to be the safest drivers, or at least to be in the fewest accidents. While age is an important factor in determining rates, other factors like whether or not you're married, or how many tickets you've received can give you a different rate from others in your age group.

Driving History

Regardless of your age, your driving record helps the insurance company determine what rates to charge you, or whether they want to insure you at all. If your driving record shows numerous tickets, accidents, or more serious violations, the insurance company will consider you a high-risk driver. This can have a negative effect on your auto insurance rates. There are a few important things to keep in mind, though.  Moving violations are viewed as more serious offenses than, say, parking violations. Being ticketed for speeding or other reckless driving behavior carries a higher penalty than forgetting to feed the parking meter, and increases the insurance company's risk in providing you with coverage. If you are ticketed for more serious violations, like driving under the influence (DUI), also called driving while intoxicated (DWI), your insurance premiums will go through the roof. In fact, your insurance carrier may even refuse to renew your policy, and you may have a difficult time getting another carrier to take you on as a customer.  Accidents can also cause auto insurance premiums to skyrocket, even if the accident isn't your fault. Fortunately, the premium increase should only last for three years after the violation, whether it's a ticket, and accident, or a DUI. But be aware that the insurance company does maintain a record of your entire driving history. Should you incur another violation, either during that three-year period, or anytime thereafter, it can have an even worse effect on your rates. Gender It may not seem fair, but gender also plays a role in determining your auto insurance rates. This factor was not created arbitrarily, though. Just like the rest of the factors that affect your rates, it's based on statistics. After compiling many years' worth of data, it's been proved that males generally take more chances while driving, and drive more recklessly. Males also drive more often, and the more you're on the road, the more chance you have of being involved in an accident. Statistics have also shown that men are ticketed for speeding more often than women are, and that men drive more miles annually. All of these statistics influence insurance companies to charge men higher rates for insurance.

Auto Theft

It seems even more unfair than the gender factor, but having your car stolen can increase your insurance rates. Auto theft is the most commonly committed crime in the country. According to the FBI, a vehicle is stolen in the United States every 28.8 seconds. The thing is, your car doesn't even have to actually be stolen for auto theft to increase your rates. It's not just expensive or luxury cars that are stolen. In fact, sometimes the entire car isn't stolen at all, just certain parts of it are taken, like the airbags. Many cars are stolen, then taken to "chop shops" to be dismantled so the parts can be sold off. Most of the time, the parts are more valuable than the entire car. It's more difficult to trace parts than it is to identify a stolen car. In addition, some locations are more prone to auto theft than others.  Areas that see a high incidence of auto theft are broken down by city and state. Insurance companies keep databases of the vehicles stolen most often, and where the highest number of thefts occur. If you choose to buy an often-stolen car, or you live in a high-risk area-or worse, both-you will pay more for auto insurance. Doing some research before you purchase a car can help you to avoid buying a vehicle that has a higher possibility of being stolen, thereby keeping your rates down.

Location

In addition to location contributing to the rate of auto theft, and thereby to insurance rates, where you live can determine how much you pay for insurance for a few other reasons. Basically, insurance rates are determined by the insurance company making a prediction of how likely you will be to file a claim. The lower the likelihood, the lower the rate. But it's not always about this probability. Sometimes it's purely about economics. Larger cities have denser populations than smaller ones, which means more vehicles, which means more congestion on the roadways. The more cars on the road, the more potential there is for accidents. Living or working in a large city can increase your insurance rates. By the same token, if you live in a suburb and rarely have occasion to drive into the city, and you mainly drive on surface streets rather than freeways, your rates can be lower. This is important to point out when requesting a quote, especially if you have two vehicles, one that is driven more in the city, and one that remains in the suburb. Some places are just more expensive to live in than others. Cities usually have a higher cost of living than suburbs, and larger cities higher costs than smaller ones. Goods cost more in cities like New York and Washington, D.C., than they do in Lincoln, Nebraska. It stands to reason that this would also apply to auto insurance. Sometimes working in a city but living in a suburb can help to reduce your insurance rates. Insurance companies will often calculate rates based on where the insured vehicle is stored or parked most of the time. In some cases, you can even get a lower rate if you keep your vehicle in a locked garage at night rather than parked on the street where it is more vulnerable to damage and theft.

Credit Score

You already know you need good credit in order to buy a car or house, and in some cases, to secure employment. But did you know your credit history influences your auto insurance rates?  Before an insurance company gets to the questions about driving habits and history, they will ask you for your social security number when you call for a quote. As they are collecting other pertinent information from you, they are already checking your credit. Your credit history, and your credit score, are significant factors in determining what rate the insurance company will offer you for coverage.
It's important to note that not all insurance companies will check your credit before giving you a quote. Some of them only check driving records. But in today's economy, and with so many people losing their jobs, a credit check can be a more important factor in determining insurance rates than ever. When researching insurance companies, check to see what each company's policy is regarding the information they collect to calculate coverage rates.  If your credit isn't sterling, you may consider going with a company that doesn't require a credit check. If you've maintained a high credit score, you still need to be concerned about whether an insurance company will request your credit report. Inquiries-even if they don't result in insurance coverage, a loan, or whatever the reason behind the request is-can still have a negative effect on your credit rating. Do as much research on insurance companies as you can before requesting a quote to keep inquiries to a minimum.

New or Used Vehicle

If you're thinking about buying a car, one of the main factors you consider is the monthly payment. You look for a vehicle in a certain price range, and shop around for loans with low interest rates. Something you may forget when calculating how much you can afford every month is auto insurance. Whether the car is new or used has bearing on what your insurance rates will be.
New cars are more valuable than used, so they are considered higher risk vehicles as newer cars are stolen more often than older ones. Also, if you're in an accident, it will most likely cost more to repair a new car than it will an older one. The cost of repairs can greatly increase if the vehicle is an import. Many luxury cars can only be repaired or serviced by dealerships, and the parts must often be ordered from the factories overseas.  Even domestic luxury cars will usually cost more to repair than moderately priced vehicles. Because of this, and because of the increased risk of theft, insurance rates are generally higher for new cars than for used. Buying a used car rather than a new one can save you money not only in the purchase price, but in years of insurance premiums.

Coverage Gaps

A gap in coverage will occur if you allow your auto insurance to lapse. There are a couple of ways this can happen. The most common way to lose your insurance coverage is if you stop paying on your policy. Another way you can lose coverage is if you fail to meet any renewal requirements, such as paying an increased premium, or if you are convicted of a serious moving violation, like driving under the influence. Some companies will just increase your premium in response to such a violation, while others will drop you altogether. It's still your responsibility to ensure you have at lest the minimum coverage required by your state. If your insurance lapses, a gap in coverage will appear on your record. This is undesirable for a few reasons. First and foremost, driving without insurance leaves you open to financial hardship. If you're in an accident and you don't have insurance, the cost of repairs will have to come out of your pocket. If you're at fault, you will also be responsible for the damage to the other party's vehicle, not to mention the medical bills that can result from an auto accident. You also may be subject to litigation by the other accident victims. Liability insurance protects you from having to pay all these expenses yourself, and will also provide you with legal representation should it become necessary.
Even if an accident doesn't occur, and you're just pulled over for a broken taillight, you will be required to show proof of insurance to the police officer. In states that require you to carry auto insurance, if you are shown to be without coverage, you will incur fines and possibly other penalties in addition to the ticket, up to and including jail time.  As far as insurance companies are concerned, if you've let an auto insurance policy lapse, either through nonpayment or by simply not replacing insurance lost as a result of a moving violation, you are a poor risk. When you try to reinstate your coverage, you may have a difficult time finding an insurer that will issue a policy to you, and when you do, you will be required to pay much higher premiums than if you had kept your insurance current.

Accidents

?If you're like most people, you buy auto insurance with accidents in mind more than a stray rock cracking the windshield, or needing to rent a vehicle if your is in the shop. If you're involved in an accident, this is when you will need insurance the most. Ironically, having been involved in an accident is also one of the factors that can have the biggest effect on your insurance rates. If you are in an auto accident, the insurance company will look at several things before they decide whether or not to increase your premiums. First, was the accident your fault? If so, what caused it? Was it speeding? If so, how many speeding tickets have you received during your driving career? If you are at fault, and if the insurance company determines a pattern of reckless driving, they will undoubtedly increase your rates. The increased rates will usually remain in effect for three years from the date your premiums increased-not from the date of the accident. As long as you avoid getting any tickets, and are not involved in any other accidents during those three years, your rates should decrease at the end of that period. Chances are, it won't happen automatically, though. Watch the calendar, and call your carrier when the time comes to request that your rates be reviewed.

But what if you weren't at fault? Most of the time, insurance companies won't penalize you for an accident that was not your fault, but there are some that will. Whether the accident was your fault or not, some insurance companies will see you as an increased risk and will raise your insurance rates accordingly. This may not seem fair, and if this happens, you may consider switching carriers. Just bear in mind that the company you switch to may charge you just as much as, if not more than, your previous company because of that same accident that wasn't your fault. Get a firm quote before switching and possibly costing yourself even more money.? There are some factors you will be unable to control, such as your gender, your age, and possibly your location. Be aware of all the factors that can affect your auto insurance rates, and work to improve the ones that you can control. Keep your policy current. Consider the type of car you buy, and whether to purchase new or used. Take steps to protect your vehicle from damage and theft. Above all, drive responsibly, and not just to keep your rates low, but to keep you and your loved ones safe.