Everybody thinks that they pay too much for their auto insurance. And, for a lot of people, it's probably true. Let's take a look at how you can trim your monthly bill and still stay on the right side of financial ruin.
The new Dodge Viper might be hot but it makes your auto insurance company's blood run cold. Not only is it capable of going way too fast for the likes of the average insurance adjuster, but it comes with this invisible "steal me" sign that auto thieves can see from miles away. A good portion of your insurance premium is determined by the type of car that you drive. If it's highly desirable by the auto thieves, like the Honda Accord or Toyota Camry or Cadillac Escalade, or it costs a lot to repair when damaged like a Mercedes Benz or Hummer, then the auto insurance company is going to lay part of their risk off on you in the form of higher premiums for your auto insurance.
Of course your age and driving record, as well as where you live, all contribute to your annual auto insurance premium. Why would the insurance company care where you live? Simple. Some parts of the country have higher car theft rates than others do, and some parts have higher accident rates. It's not just the "part" of the country that you live in, auto insurance risk tables track premium levels right down to the zip code.
Well, other than lowering your sights by getting a Yugo and moving somewhere that hasn't reported an accident or car theft since 1492, you best bet is to do what you would do when you are considering any major purchase - shop around. All auto insurance companies are not created equal and all rates aren't either.
Some insurance companies sell auto insurance through their own or independent agents, and others sell direct to the consumer. Whenever an agent is involved there are usually commissions to pay. Commissions drive up the cost of the policy and that cost is usually passed along to you.
While most State Automobile Insurance regulatory boards set the maximum amounts that can be charged for auto insurance premiums, none of them set the lowest. They let the market drive the prices. In addition, there are discounts offered by one company that may not be offered by another.
Once you find a company with a good rate, don't automatically assume that they are on the up and up. You want to check out an auto insurance company's record of payment and their overall reputation in the insurance industry before you write them a check. You can get the 411 on any auto insurance company by visiting the Standard & Poors web site at: ww2.standardandpoors.com. They track auto insurance company performance and assign a rating to each company.
Of course, the best auto insurance rates in the world won't do you any good if the company is not authorized to write auto insurance in your state. So make you way to your particular state's Insurance Commission's web site and check to see if your prospective insurer is listed there.
There are lots of little discounts available that, when added up, can amount to significant savings. When you are auto insurance shopping ask each company what discounts they offer. Here are a few of the more common ones:
Multi-vehicle auto insurance discount, or auto and home/condo insurance discount. Sometimes a boat/auto discount is available.
Driver's education/Defensive-driving class discounts are often available for young drivers. Some companies also offer auto insurance discounts to students with Honor Roll grades.
Auto Alarm and other anti-theft protection such as having your VIN (Vehicle Identification Number) etched into all of your auto glass, or installing a signal-activated automobile recovery system, will earn you an auto insurance discount.
Senior Citizen rates usually offer up to 25% off the entire premium if the primary driver is 65 or older and there are no inexperienced drivers on the policy.
Passive restraint systems like air bags or automatic seat belts can get up to 25% off of all bodily injury auto insurance coverage.
Public Transportation discounts can net you a 10% savings off of the property damage and collision portion of your auto insurance coverage if you can present proof that you commute to work on the bus, train, or subway.
Low mileage auto insurance discounts are offered to drivers who rack up less than 7,500 miles per year.
Sometimes auto insurance discounts are available through clubs and organizations such as workplace, education, military and fraternal organizations that you may be a member of.
Safe driver auto insurance discounts may be available if all the drivers to be insured have had no accidents and no motor vehicle violations within some period of time that is different for each auto insurance company.
Economy car discounts are often available if you own certain cars which are classified as "economy" by your auto insurance company.
Farm vehicle discount. If you are a farmer or rancher, and you operate vehicles which are not primarily used on the road, you can usually get substantial auto insurance discounts.
One of the quickest ways of saving big bucks on your auto insurance is to increase your deductible. If you have, say, a $200 deductible, and you raise it to $500, your premium will go down immediately. Likewise if you raise a $500 deductible to $100 you could save as much as 40% in premiums!
Most States require auto insurance these days, and the ones which don't—well you should be very afraid to drive in them! But just because you have to buy insurance doesn't mean that you have to pay top dollar. Use these common sense tips and you could save a bundle on your auto insurance.