Auto insurance rates
When we think of leisure shopping we often envision light moments at a plush mall that enthuse us in a way not very common, when buying something as mundane as auto insurance rates. But, this exercise can reap long term rewards and save you hundreds of dollars for making your favorite splurges!
Americans have been nonchalant buyers of auto insurances. According to market surveyors, consumers very often grab the first price offered to them and unquestioningly accept the routine rate hikes without showing as little as a concern to look for alternatives that might save them a couple of hundred dollars annually. With a plethora of options available to todays consumers, in a tech-savvy world, it makes all the sense to compare not just the rates but also the kind of coverage and exclusions being offered by various insurance carriers. All that from the comfort of their home!
Progressive auto insurance rates, in an independent survey conducted between 1999 and 2004 throws light on the importance of comparative shopping. It revealed that a 6 month auto insurance rate may vary significantly between an average low of $481 to an average high of $586 among companies, across the country. So, if you are a car owner already bearing the brunt of high insurance premiums and looking for a change of carrier or someone contemplating to buy a car, here are some helpful tips that can get you started in the right direction!
Get competitive quotes
Scour the internet to get access to various auto insurance rates websites. Internet has indeed catapulted competition among insurance companies. It has become easier than ever for consumers to shop for low insurance rates, analyze coverage and compare premiums. Nowadays getting an online quote is just a snap. Fill in an online form, put in some demographic details, such as age and gender of the driver, the type of car owned and credit score to site a few, and receive a quote in minutes for cross reference with other quotes.
Call nearby independent agents but make sure to consult with friends and family for important leads on their credibility. Call a couple of the larger carriers such as All State, Nationwide, Safeco etc. and other phone based carriers as GEICO and Amica. Scot McCartney, a spokesperson for Independent Insurance Agents in America has an important suggestion for consumers. He says that customers must make several calls, ask the same question and be sure to get quotes on exactly the same coverage from each carrier before purchasing any auto insurance policy. No matter which auto insurance rates provider you pick make sure he is trustworthy and reputable. This way you can minimize chances of being turned to the cold particularly while making claim settlements - in the event of damage, accident, theft or vandalism of your car.
Make wise choices: Get the know how of factors that influence auto insurance rates
There are pointers based on which an insurance company fixes rates for its customers. If you are planning on buying a car or switching insurance company these can act as guides to assist you at every step of your decision making process. A small change in your lifestyle or your choice of vehicle can have a big effect on the rates you pay.
The major factors determining auto insurance rates fall into four basic areas. Gender, age and marital status:
These are valuable indexes for insurance companies in determining risks they are pitted against, and quite naturally play a pivotal role in reckoning the cost of insurance to a customer. Generally speaking young and single men under 25 years of age fall into the high risk category while married, middle-aged, non-smoking mothers represent the lowest.
Driving record:
Tickets, accidents, previous convictions under DUI (driving under the influence of alcohol) add up to higher insurance costs.
Geographical Location:
Living in an urban area, particularly big cities, is a trigger to bigger insurance rates due to higher density of traffic which spells a greater chance of accidents and in general a greater likelihood of theft, vandalism and fraud. States like New Jersey, Washington D.C, New York and Massachusetts typically have the highest average insurance rates whereas Nashville (TN), Raleigh (NC), Roanoke(VA), Green Bay (WI) cost lower. So, if you are relocating to a bigger city factor in the higher cost of insurance. Do not forget to shop for competitive rates from a wider selection of insurance companies that a bigger city typically offers, to keep your insurance liabilities minimal.
Type of Vehicle:
The make and model of your vehicle can have a big influence on your insurance bill says Russ Rader, spokesman of the Insurance Institute for Highway Safety. According to Radar, vehicles that top the insurance-cost list tend to be either high horsepower, high dollar or expensive to repair cars. Sports car for instance, is an expensive choice as they are mostly favored by youngsters who are risky drivers and therefore are more susceptible to crashes. Cars that are popular targets for thieves may cause your insurance companies to charge you higher rates. A car with expensive replaceable parts is likely to cost you more on its auto insurance rates such as, luxury or high-end cars. If you are planning to buy an SUV or already drive one your liability premium could go higher because of increased damage a vehicle of that size can cause in the event of an accident. Extent of use of vehicle: Statistically, the more you drive greater are the chances of being involved in an accident. Higher annual mileage will result in higher premiums. Carpooling to work or business and use of public transportation can help you in keeping your insurance rates low.
Inquire about discounts
Buying multiple insurances, like a homeowners insurance and auto insurance, from the same insurance company can qualify you for discounted rates. You may also get discounts for insuring multiple cars under the same policy or with the same company. Enquire about added benefits or discounts from your insurance company, to which you may qualify for being a safe driver, or for having earned good grades at school or look for certain profession specific discounts. 21st Century Group sells auto insurance in Arizona, Nevada, Oregon and Washington and offers engineering and scientist discounts to students of engineering and science in those states on the basis that they are found to be low-risk drivers. Horace Mann Insurance (known to sell insurance in every state except Hawaii and New Jersey) offers discounts to teachers who belong to state education associations or the National Education Association (NEA). Horace Manns discounts start at 8% and are based on the assumption that teachers have a stable occupation, stable employment and they are aware that they are under scrutiny by the community. GEICO offers a 2 to 15 percent discount to participating and retired members of the military. The military discount is available in all states except Georgia, Indiana, Maine, Massachusetts, Michigan, Mississippi, New Jersey, New Mexico, Tennessee and Texas. Web surfers who wish to purchase insurance online can benefit from discounts offered by companies such as Unitrin Direct. Unitrin cuts $50 off the premium for purchasing policy directly from their website.
\Get only the coverage you need
Coverage types are the core of any insurance policy. You could either be buying a lot more coverage than you need or too few that could be inadequate to support you through your monetary losses in the event of an accident. Listed below are some basic coverage types: Liability coverage is the primary and usually mandatory part of the auto insurance equation. Liability as the word implies protects the insured party against damages caused to another vehicle or body parts in case of an accident to which he is liable. It is usually quoted as a three part number 100/300/50. Respectively that means for any one accident you are covered for $100,000 in bodily injury per person, $300,000 for bodily injury total, and $50,000 in property damage. South Carolina, Virginia, Tennessee, New Hampshire, and Wisconsin are the five states that do not require liability coverage for automobiles. The other key coverage types are collision and comprehensive. They are expensive and usually optional. Collision coverage is meant to cover expenses for damage caused to your car in a collision. Typically one can skip buying collision coverage. Safer the driver the less necessary it becomes. Comprehensive coverage protects against any unforeseen disaster such as theft, vandalism, fire, ice, earthquakes, falling trees, volcanic eruptions, to site a few. Those residing in good-climate, low-theft areas may not need this at all. Personal Injury Protection (PIP) covers initial medical bills for you and your passengers. It also covers for resulting loss of wages. This is an option that those with good health insurance plans might not want to purchase. Uninsured motorist coverage covers for property damage and personal injury when hit by an uninsured motorist. It also covers hit-and-run crashes and is required by many states and is quite inexpensive. Consult with your insurance agent for details about coverage and the costs of procuring it.
Credit score
More than 90% of insurers use credit information to create an "insurance risk score" which is then used to determine auto insurance rates. There appears to be a direct correlation between insurance risk score and the likelihood of filing a claim. Insurance scores are intended to evaluate one's stability. It means paying bills on time and having the same credit accounts for extended periods of time. If these conditions are met a person is evaluated as being financially stable as opposed to one who pays late or sporadically and opens or closes accounts frequently. Although insurance risk scores are not available to customers it is very similar to credit scores. If there has been unusual credit activities for a limited time frame, you could benefit by allowing a time lapse, say a month to redeem your credit score before buying auto insurance. If your credit score has always been shaky be prepared to pay higher rates as your insurance company will deem you as high risk. With gas prices on its ascendancy more and more car owners are trying to cut back on other costs arising out of their automobile. But there is good news! According to reports from Insurance Information Institute (I.I.I), the cost of auto insurance is expected to rise by just 0.5% in 2006, the smallest increase ever in six years.
According to Robert Hartwig, senior vice president and chief economist of the I.I.I. The cost of auto insurance is increasing by about one-sixth the rate of inflation and little more than a single gallon of gasoline. He added that many people who drive safe cars, have excellent safety records and good credit-based insurance scores may see their rates go down, often by 3 to 5 percent. This is welcome news for drivers who have been battered by record high gas prices over the past year. Whats more, Hartwig said, people who trade-in their expensive gas-guzzlers for smaller, more fuel efficient and less expensive vehicles may see even lower insurance costs in many cases. Some insurers now offer special discounts for hybrid vehicles!Declining number of auto accidents, safer cars, new auto theft technology, fraud-fighting efforts and graduated licensing laws for teen drivers have also been cited as additional key factors contributing to the cost slowdown. It is now evident that keeping auto insurance costs down is well within our reach. A little caution and related knowledge power can go a long way in putting some extra bucks in your pocket.
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