Saving Money on Car Insurance

Premiums seem to move in only one direction: up. But there are ways to save.

Several hardy factors are at work driving up the cost of auto insurance. The price of replacement parts and labor, the complicated nature of modern mechanical and electronic components, rising medical costs, fraud, and the litigious nature of American society are prominent among them.

Fortunately, there is a reliable factor that can work to control the cost of your car insurance: you. Here are some simple ways you may be able to save yourself some money.

Compare coverages as well as prices. Some policies may offer extra coverages, such as comprehensive and collision damage on rental cars. Some policies provide a rental car for all or part of the time your vehicle is being repaired after an accident. Go into detail about all coverages with the agent before you buy.

Be sure to ask your agent if you're getting all the discounts you're entitled to. There are many possibilities. A discount may be available if you have two or more cars on your policy. Some insurers offer a discount to customers who have more than one policy, such as a homeowners and an auto policy, with the same company.

Buy only the coverages you need. Some drivers drop collision coverage because they own older vehicles that have depreciated to an amount they could cover out of their own pocket, in the event of a total loss. Since lenders require this coverage, only drivers whose vehicles are paid for should consider going without.

Consider raising deductibles on comprehensive and collision coverage. A deductible is the amount of money you must pay before an insurance company will pay a claim.

As with dropping collision coverage, this requires striking a balance between how much risk you care to take on and how much you want to lower your insurance premiums.

Pay for your policy in full at the time of purchase. It can save you finance and installment fees.

Maintain your coverage without lapse. Some companies provide discounts to people who have a history of continuous coverage, including no missed payments.

When choosing your next car, consider the cost of insuring it. Models that are stolen less often, that are involved in fewer crashes, and that cost less to repair after a crash generally cost less to insure.

The Highway Loss Data Institute publishes information on injury, collision, and theft losses for many auto makes and models. Their statistics show that the GMC Safari, Honda Odyssey, Buick LeSabre, and Mercury Grand Marquis have particularly good stats. At the other end of the scale, the Acura Integra, Mitsubishi Montero Sport, and four-door Kia Sportage do less well. You can see all the findings at http://www.iihs.org/. Before buying a car, ask the insurance company how much it will cost to insure the model you're considering.

Review your policy every year. Rates may not stay constant, and your situation may also change. The distance you drive annually or the number of drivers in your household may vary.

Exclude problem drivers from your policy.

Drive safely. Auto insurance premiums are based on many factors; these can vary from place to place and may include your driving record, where you live, what you drive, and your age (youth is usually a disadvantage, although in California, years of driving experience substitutes for age).

If you already have chosen an insurance company-friendly vehicle and you are unwilling to relocate, try to avoid citations and accidents while you get older and nearer to qualifying for a mature driver discount.

This article was first published in November 2002. Some facts may have aged gracelessly. Please call ahead to verify information.

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