Some Practical Advice on How to Save Money On Insurance

Shop around.

Prices vary from company to company, so it pays to shop around. Get at least three price 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. Others do not use agents. They 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. Select an agent or company representative that 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% to 30%. Going to a $1,000 deductible can save you 40% or more. Just remember, the deductible is the amount you pay before the insurance company pays anything. For example, if the accident costs were $3,000 and your deductible was $1,000, you would pay $1,000 and your insurance company would pay the remaining $2,000.


Reduce coverage on older cars.

If you are running an old clunker, you might want to think twice about collision coverage. 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 cars. 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.


Maintain good credit.

Your credit rating may affect what you pay for insurance. 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. Most people have good credit histories, so most people benefit.


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.


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
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

Don’t forget 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.