Put Brakes On Car Insurance Rates

Smart Money Magazine On How To Take Advantage Of Declining Premiums

(CBS)  Consumers may catch a break on auto insurance rates this year.

Premiums are expected to fall for the first time since 1999, according to Smart Money magazine (http://www.smartmoney.com/).

So, says senior writer Russell Pearlman, now's a good time to try to get a deal on your coverage.

On The Early Show Tuesday, Pearlman offered some strategies to help you save.

Make no mistake — some legwork is needed. But it can pay off.

SHOP RIGHT

Every car insurance company tells you it has the best deals, but it really pays to comparison shop. Get at least three quotes. Companies are more willing to cut deals right now, since they've made so much money in the past few years. Look at multiple companies and plans before you choose your policy. There are many Web sites that help you do this.

If you want to use the Web to compare quotes, you can go to a site such as NetQuote.com.

However, you should also consider calling companies like GEICO and USAA, since you won't find their quotes on these comparison sites. Those sites make their money on referrals and commissions, and neither GEICO nor USAA operate that way.

So, checking the Web and a couple of quick phone calls are the best way to make sure you are getting the best deal.

Also, contact your state insurance department (a quick Google search will help) to find out which underwriters get the fewest complaints.

And check your credit report for errors.

CUT KIDS' RATES

Unfortunately for parents, statistics show that new drivers are more likely to get in an accident. So, if you add a teenage boy to your policy, it can double your premium! Even adding a girl can send it up by 50 percent.

But, if you have a smart kid who generally does well in school, if you can show the insurance company that he or she has a "B" average or higher (the easiest way is to bring his or her high school transcript into your insurance company), you could be eligible for a discount on your premium.

A good example is State Farm. If you have a new teen driver and he/she is a good student, they can get significant discounts: 25 percent for boys and 15 percent for girls (girls have lower premiums to begin with, hence the lower discount). That applies regardless of the type of car and across the country.

Another way to get a discount is if your child takes and passes a driver-safety course; that can save another 15 percent.

Also, this applies to drivers of all ages but, if you have an older vehicle, consider dropping the collision coverage on it, because the replacement value might be negligible. Many parents give their child their old car, so if you do that, you need the insurance to cover the person, but not necessarily damage to the car. You're paying for a service that isn't going to be worth it.

Accepting a higher deductible can also shave off a few bucks.

RESEARCH AND NEGOTIATE

If your car is "totaled," your insurance company will want you to go to a repair shop that it's worked with before. Always get a second opinion from an independent repair shop.

But you should really go to a Web site such as Edmonds.com to find the true market value. Odds are there will be a difference between what the insurance company says and the Edmonds quote.

And don't be afraid to negotiate. Insurers always get nervous when you take notes; when you have facts and show that you're doing research, they'll see you as an informed customer and tend to be more open to negotiation.

Another idea: If you already have car insurance through a company on one of your cars, you can sometimes get a good deal by adding another car to the same company. They may give you a discount on the second policy. It can also apply to other types of insurance: homeowners, renters, etc. -- they may give you a steeper discount if you agree to additional insurance with them.

[hermit22]

Remember: you are always ALWAYS better off if you never have a claim.


Posted by Rickybrite at 10:36 PM : Jul 25, 2007

Rickybrite, if we never have a claim, why do we ever need this product? why are we FORCED to buy it?

REALSENSE, there is some place around chicago or something, where the poor people zip code were regularly hit up for HIGHER insurance rates....somebody got on the insurance companies to knock it off...wish i knew who and how. guess they found a mean junkyard dog lawyer.

[sclaires]

The insurance rates are too high now to begin with but the industry will say that it is because of the cost of repairs. Well,if the car manufacturers would make their vehicles where they stood up to impacts better, then it wouldn't cost so much to repair. Plus, the insured should not be made to use second-hand parts or parts that have been repaired. My car is now 16 years old and if someone should hit it where it was damaged but repairable, I would want it repaired instead of being totaled due to age. Why should I be forced to get a new car with high payments (which I can't afford) and even higher insurance just because someone else's insurance doesn't want to repair it. There is something wrong there!!!!

[erabrab]

Insurance policies aren't generic. There are differences between companies and sometimes those differences are worth the extra money. Shop coverages also. In fact, shop coverages FIRST. Cheap premiums are never the best deal, and I don't know how Pearllman can responsibly make that claim.
You should ALWAYS monitor your credit---not just because of insurance premiums.
Even if your teen is a good student and has had DTrng, he/she is still much more likely to be in an accident than you. Focusing solely on your insurance premium is parental negligence.
Claims adjusters deal with lawyers/judges/cops/undertakers---all kinds of people. They are not the least bit intimidated (or 'nervous') because you take notes. Whether informed or not, you're going to get what your contract calls for.
Pay your premiums on time. For some oddball reason people who pay premiums timely have less claims than those who are fiscal miscreants. Remember: you are always ALWAYS better off if you never have a claim.

[realsense]

What really sucks is they are using your credit for insurance rates, thats a bunch of ***. They say that people with lower credit scores are a greater risk. What does my credit have to do with my house getting hit by lightning or a deer jumping out in front of me. Just another way to get a buck out of people.

[hermit22]

burneb, in 30 years what do you have to show
for your "investment"?

i'm glad you like your insurance agent.

[burneb]

Insurance companies may file "rates" (similar to trucking company tariffs) with a State insurance commission, but there is often leeway as to how the agent or company is willing to classify a driver or vehicle to qualify for a lower premium or better coverage. That's where the negotiation comes in.

The reason I have stayed with my agent (car, home, personal liability) for 30 years is that he actively searches for ways that my family might qualify for better deals -- all legal and no misrepresentations to the company involved. Many agents don't want to take the time or risk any commission dollars to do this, and they will look pained or get evasive when you press them on the possibilities.

[hermit22]

when my old buggy croaked and the best i could do is get my gorgeous old METHUSELAH, who is trying to live to 969 years too, the insurance lady said i had to pay for "non-owners" insurance while i didn't even have a car. what is crazy about THIS pictuer? Methuselah cost $400. eat your heart out Donald Trump! i'll give you a ride if you take me out with the mrs. and the baby to a FANCY dinner. i can be civil.

when people complain about religious people getting money, they really should be complaining about the law that says we are FORCED to buy this paper work from the insurance companies that we generally have nothing to show for at the end of the year! insurance should be charged acorrding to the miles driven....if you never get off the farm....send them $2.oo and some spit and that should be more
than enough!

[fuzluver1]

NO NO NO NO!!!!!!!

Insurance companies are bound by the rates they file with their respective states. They CANNOT "cut deals" on insurance rates, it is ILLEGAL!

Also, USAA is NOT open to the general public, they cater to active duty and retired military only.

Other than these glaring errors, I agree with everything else in this article. Why? Because I happen to be a licensed insurance agent!