low auto insurance tips and tricks

2008-12-24T23:03:00.001-08:00

Smart motorists rely on seatbelts and airbags as the first line of protection in the event of a car accident. Another important safeguard — especially for financial security — is understanding and purchasing appropriate automobile insurance coverage.

While liability or no-fault insurance is mandated in most states, it is also a necessity for nearly all drivers to protect their assets in the event they cause a motor vehicle accident. Still, according to a 2006 Insurance Research Council study, 15 percent of U.S. drivers were uninsured in 2004, up from 13 percent in 1999 Insurance companies try to Woo Women

"Consumers should carefully assess their auto insurance needs, and shop around for the best price and most appropriate type of cover-age," said Alessandro Iuppa, National Association of Insurance Commissioners (NAIC) president of the Maine Bureau of Insurance. "Because auto insurance is a highly competitive market, consumers should find a variety of companies vying for their business." Review Your Insurance
It is in the consumer's best interest to re-evaluate his or her auto coverage each year. However, a 2005 NAIC consumer study showed a significant number of drivers (20-35 percent) from all life stages had not reviewed or updated their auto insurance in the past 12 months.

Understand the Basics
Several factors may affect auto insurance premiums. These factors include, but are not limited to, vehicle make and model, credit history, driving record, age, gender, marital status, annual mileage, mileage to work, coverage limits, claim history and territory. Territory, in some cases, is defined by ZIP Code and, in other cases, by geographic boundaries developed by insurers. It is important to understand that not all risk classifications that are listed apply in every state.

Insurance companies differ on which criteria is weighed heaviest when determining auto premiums, while some states mandate which factors can be emphasized. Parents also will see a significant change in premium when adding a teenager to the family auto policy. In some states, rates may double for a teenage boy and increase as much as 50 percent for a teenage girl. There are several types of insurance coverage to consider when purchasing an auto policy:

Liability insurance is required by most states. It covers medical expenses and damages to another person's property as a result of a motor vehicle accident caused by the insured's negligence.
Some states mandate "no fault" auto insurance, which provides coverage for medical expenses, rehabilitation, funeral expenses, lost wages and in-home assistance to the driver and his or her passengers, regardless of who is held at fault in an accident.
Many policies offer or include uninsured or underinsured motorist protection, which provides coverage for the insured and his or her passenger(s) if they are injured in a collision caused by an uninsured or underinsured motorist.
Drivers with newer or leased cars may need to carry comprehensive insurance, which covers vehicular damages caused by fire, theft, wind, hail or a run-in with a deer.
Collision insurance covers the cost of repairs or the actual cash value of the vehicle, if damaged or totaled in a crash or rollover. When financing a vehicle, banks often require comprehensive and collision coverage until the insured has paid off the loan.
Consumers with large financial assets may want an umbrella liability policy, which provides additional coverage ($1-5 million) beyond the primary personal auto liability coverage.
General Money Saving Tips
Before buying or leasing a vehicle, remember that the make and model can drastically affect insurance rates. For example, luxury cars, high performance cars and convertibles — all of which may be attractive to thieves and more costly to repair ÿ are more expen-sive to insure than basic models. All consumers should keep the following tips in mind when evaluating their auto insurance needs:

Shop around and compare rates from different companies.
In some cases, an insurance company may offer a multi-policy discount if a consumer purchases both auto and homeowners coverage.
Ask about discounts for cars equipped with safety features, such as anti-lock brakes, anti-theft devices and automatic seat belts.
Consider raising the deductible on your collision or compre-hensive insurance. With a higher deductible, the insured will be responsible for more of the cost to fix damages caused in an accident, but will pay a lower premium.
Some companies offer discounts to drivers who have three or more years without an accident or moving violation.
For older cars, consider dropping collision and/or comprehensive coverage altogether. In many cases, the insurance company will only pay the "book value" of an older car in the event of an accident — which may be much less than the actual cost of repairs.
Ask your insurance agent if the auto policy extends to rental cars. Often liability, no-fault and collision coverage on a personal policy extends to a rental car for personal use.
Maintain a good credit history, because a credit score can have a direct impact on auto premiums.
Make Adjustments Based on Your Life Stage
"It is important to review your auto policy each year," said Catherine J. Weatherford, NAIC executive vice president and CEO. "Decide whether your insurance needs have changed and update your coverage accordingly. If you have any questions, be sure to check with your state insurance department."

Consumers' insurance needs are constantly changing. Major events, such as turning 25, getting married or improving your credit rating, may make you eligible for lower rates.

A few extra tips to consider:

Consumers who are serving in the military and deployed abroad should consider lowering their liability coverage to the state-mandated minimum and dropping collision coverage altogether if the vehicle will not be driven for an extended amount of time. However, they may want to consider keep-ing comprehensive coverage, which provides coverage if a car is stolen or damaged, but raising their deductible. Check with your agent or state insurance department regarding coverage requirements under these special circumstances.
Young families, who are likely to be car pooling with other people's children, should consider raising their liability coverage. Before purchasing a bigger car, such as an SUV, they also should consider how the vehicle will impact their insurance rates.
For established families with teen drivers, parents should ask if their insurer offers discounts for teens that pass a driver's safety course or maintain a B average or better in school. Parents should ask whether they can receive an "accident forgiveness" clause that promises not to raise premiums if their teen gets into one minor accident. They also should consider raising the family's deductible and having their teen drive the family's oldest, least expensive car. Or, if they can afford it, consider purchasing an older car for their teen and foregoing comprehensive and collision insurance on that car.
Drivers over the age of 50, who historically tend to be more cautious than their younger counterparts, may be eligible for reduced rates. Seniors should consider taking a driver's refresher course, like those offered by the AARP or AAA, which may help them qualify for a discount.

low auto insurance for all

low auto insurance tips and tricks