Friday, March 5, 2010

How can I save money on my Car Insurance?

Affordable personal auto insurance in today's economy can be a moving target. Here are 5 areas you can control to help you maintain the costs of your auto insurance without sacrificing critical coverage protection for you and your loved ones.

  • Driving Record - The most obvious tip, but it can not be overstated. Your driving history is the biggest factor that insurance companies will look at when evaluating you for coverage. So drive defensively and consider taking a Defensive Drive Course. The course is a great refresher for good driving habits and rules of the rode. The cost of the course will often be recouped in the savings on your insurance in the 1st year and it is good for 3 years.
  • Manage your Credit - The auto insurance companies have established a link between an individuals credit history and their likelihood of having an accident. Using what is referred to as your insurance credit score, they have modeling programs that can predict for them if your likely of having an accident. Managing your credit will help you to keep your rates low.
  • Vehicle Type - You car is a significant factor in the cost of your insurance. Cost, age, body type, engine performance, weight, etc.; all factor in to what your premiums will be. Generally, the newer and more expensive a vehicle, the higher the cost. When you are considering a new vehicle, contact your independent insurance agent and have them give you a quote for your insurance if you were to buy the vehicle. The cost of your insurance should be part of your purchase decision.
  • Premium Payment - Pay on time, another obvious statement that can't be said enough. Insurance companies are less and less tolerant of poor pay customers as they add significant costs to the servicing of the policy. A poor pay history can make you ineligible for preferred pricing. Also, pay in less installments; the less frequently you make payments (i.e. quarterly vs. monthly) the less installment fees you pay. These fees can range from as little as $1.00 to as high as $15.00! Several companies are now even offering a Paid in Full discount!
  • Target Coverage - Make sure you are paying for the coverage you need. It often makes sense on your collision coverage to assume risk (i.e. higher deductibles) of loss to your vehicle or remove it all together if the vehicle is older; and use those savings to maintain higher limits in other areas (i.e. liability, no-fault, uninsured motorist, etc). You may want to consider removing the comprehensive coverage as well, though if wish to keep glass coverage you will need to keep this coverage in place.
  • Fraud - About 10% of your insurance premium is the result of fraud. Insurance companies, regulators and law enforcement personnel are in a constant battle combating fraud. You can help; ask your state legislators to make the fight against insurance fraud one of their priorities. Report insurance fraud to your insurance agent, insurance company or local police when you see or suspect it. Speak out against insurance fraud to your friends, family, and business associates. After all, it's not just the big insurance companies that pay. All those costs eventually filter down to you.

Finally, a significantly important way you can help save money on your auto insurance is by working with an Independent Insurance Agent. An independent agent will advise you in the areas named above and as well as the right coverage for you. Then, with their freedom to go to multiple carriers, they can price out your customized coverage to make sure you are maximizing the discounts and credits you deserve.

Sir Henry Taylor


  1. I couldn't agree more with you, Jamie. It is important that you seek the help of an insurance agent. Although you'll need to shell out some more for their service, the amount that you can save from premium payments and doubling up of the claims that you’ll get is substantial compared to the additional cost of enlisting their expertise.

    Fe Penley

  2. I can summarize your tips in one word: responsibility. We all know that car insurance is a legal requirement. Hence, we have a responsibility to take it. But it doesn’t stop there. Money is harder to get, and that won’t change any time soon. By simply being responsible with our driving, paperwork, and other technicalities that involve insurance, we can save money. And doing that makes us functional members of the society.

    Elnora Cowger

  3. Dealing with car insurance needs proper decision-making skills; and having the right insurance agent will make the process smoother. Accidents are inevitable and insurance is our best friend in times like this. I hope that those who considers car insurance will take note of the things stated here. :)

    + Cayla Dupont +

  4. Everybody wants an affordable auto insurance that covers the most necessity of the vehicle but is it that easy to find? Well, your 5 tips are helpful and by following them it's possible to save a little. While buying a new car, one needs to make an inspection regarding a good insurance agent. If you're dealing with a reputed service center then you probably in the right path, you may ask those guys for a better auto insurance option. I prefer my service center Carrollton BMW Repair for all my auto related issues.

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    - J.C.

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