Auto Insurance Tips and Advice

2008-02-01

How to Lower Your Insurance Premium

6. Payment Planning to Reduce Auto Insurance Rates
 
One of the easiest ways to cut the cost of auto insurance is to properly set up a budget in order to pay the premium in full and not miss a payment.  It’s not as difficult as it might seem but it does take a little advanced planning to make it work. The trade-off is peace of mind and saving money on your auto insurance rates.
First, even a short lapse in coverage can result in an increase in premium and loss of potential discounts you might have been eligible to receive. Since you are required by law to keep insurance, it isn’t something you can go without so plan accordingly.

Likewise, paying your insurance premium all at one time can also save on convenience fees and other charges. Depending upon your carrier, making monthly or quarterly payments can increase your total insurance charges by 10% or more.

Proper budgeting will help you get a grasp on both issues. First, calculate what your premiums are for an entire year. For example, let’s assume you pay $1,200 annually. Send in full payment and then set aside $100 per month toward your insurance.  Most insurance companies send out a bill every six months. When the bill comes due you will have $600 waiting to pay the premium in full resulting in reduced convenience charges, full discounts and no threat of a lapse in coverage.

7. Research those Rates!

Do you really understand what you are buying when it comes to purchasing auto insurance? Surprisingly, most people don’t. In this case, what you don’t know can hurt you; you could end up spending too much.  Spend a few minutes on getting acquainted with auto insurance basics to buy the perfect policy.

1. Medical Payment Benefits. If you have full health insurance coverage through your employer, or other provider, then you may not need additional health insurance coverage through your auto insurance. On the other hand, if you don’t have health insurance or are under-insured then this is one of the more valuable types of insurance to have. Remember, buy what you need but don’t cut costs on essential coverage.

2. Rental Car Coverage. Check your credit card to see if you already have automatic coverage when renting a car. Many credit cards –especially gold or platinum level cards – provide rental car coverage as a standard benefit.

3. Towing Insurance. If you are a member of a travel club or other popular automobile groups then you might already have towing insurance. Stop duplicating benefits and save a few dollars.

4. Gap Coverage. Gap insurance coverage pays the difference between the balance amount of your auto loan and the actual cash value of the vehicle. If you have just purchased a vehicle then Gap coverage might be one of the best bargains out there. If you bought right (and don’t owe more than the vehicle is worth) then eliminating Gap insurance will further reduce your rates.

5. Loss of Use. This provides a rental car when your car is being repaired. If you own a second automobile then you may not need a rental car or Loss of Use coverage.

8. Double Check to Lower Auto Rates

If you have recently relocated, married, retired or experienced other life-changing events don’t forget to double check your insurance. It might save money when you renew your policy. Here are some common events that can result in savings on your auto insurance:

1. Relocating. Typically cities have more driving accidents – and therefore higher insurance rates – than smaller towns. If you have moved to a new city, or even to a new zip code in the same town, be sure to ask your agent how it will impact your auto insurance rates.

2. Marriage. It’s not a surprise that teenage boys have some of the highest insurance premiums. But singles in general tend to pay a bit more than married couples for insurance. If you are newly married call your agent and ask for a discount. Don’t forget to ask about multiple coverage discounts at the same time.

3. Age. There are certain “milestone” ages where your auto insurance premiums drop as long as you have maintained a safe driving record. These milestones vary depending on the provider; turning 25 is a common one, as is retirement. Ask about a Senior discount or, if you are younger than 25, consider taking a Safe Driver course to reduce premiums.

4. New Job. Remember, insurance is partially based upon how many miles you drive each year, so if you have
recently changed jobs and will be driving fewer miles be sure to request a discount.

9. Buy Right to Reduce Auto Rates

Did you know the best time to reduce auto rates is before buying your next car? It’s true. Rather than shopping for your next car based upon price alone, be sure to consider how it will impact your auto insurance premiums. You just might be able to afford a lot more car for the money!

Use this handy checklist to get started:

1. Don’t buy a car with a high theft rating. Ever notice how station wagons and mini-vans are almost never stolen? Some cars are more highly sought out by thieves for parts or stolen outright. By avoiding those makes and models of cars at the top of the list you can reduce insurance premiums. Don’t worry - there are still plenty of cool cars to choose from! To find out which cars are stolen most visit the National Insurance Crime Bureau at www.nicb.org.

2. Avoid flashy colors like red or yellow. Studies have shown that brightly-colored cars are more likely to get tickets, thereby increasing insurance rates.

3. Consider repair bills. Not only will it save you money on maintenance but it can also save you money on
insurance premiums. Luxury cars, certain foreign imports and other vehicles that cost more to repair will also cost more to insure.

4. Anti-Theft measures. When shopping for a car consider spending a few dollars extra for anti-theft devices, security alarms, etched VIN (Vehicle Identification Numbers) and other measures.  Be sure to look for an “active alarm” rather than a passive alarm. Also, many local police stations will assist in etching VIN numbers if your dealer can’t do it for you.

5. House it. Putting your vehicle in a garage will not only help maintain its great condition but also reduce your insurance rates.

10. Go Green to Reduce Auto Insurance

Here are a few quick tips on how to save the environment and save money on your auto insurance premiums at the same time.

1. Car pool or take public transportation at least once a week. Reducing the total miles driven can reduce your insurance premiums and it is good for the environment too. Not only will it save on the wear and tear of your car, reduce the cost of gasoline and other maintenance but driving less results in reduced auto insurance rates.  It varies from provider to provider but 15,000 and 7,000 miles per year are two of the major price break points.

2. Keep the commute to a minimum. Sitting in traffic isn’t good for you or the environment. Instead, plan your commute time. Living near your place of employment can greatly reduce the time it takes to get to and from work but so can time management.  Try to time your travel during off hours and take advantage of the additional freedom to get your errands done at the same time.

3. Hybrid Discounts. Some insurance companies are now offering hybrid car discount rates up to 10% off regular premiums.  There may also be tax advantages so be sure to add up the full benefits of owning a hybrid for you and the environment.

4. Don’t drive when you can walk. Do you catch yourself jumping in the car to drive two blocks to pick up bread or go to lunch? Make it a practice to walk if it is less than a quarter mile. It’s good exercise, better for the environment and will reduce the amount of miles you put on your car each year which can result in lower auto insurance rates.

5. Search for “green” auto insurance companies. Reward those companies that are environmentally friendly and engaging in sustainable programs like the Carbonfund.org renewable energy credits or other “green” programs designed to offset emissions.

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