Auto Body Shops Know Best When It Comes To Car Insurance Policies
We have all seen the ads on TV; “you could be paying too much for car insurance”. How much of that is actually true? Could you actually save hundreds or thousands on your car insurance?
The answer is yes, and I’m going to give you some pointers on how to save.
Like most people you get an auto insurance policy as often as you change cars, which could be as long as ten or more years. Shopping for car insurance is no fun. Unless you get into a car accident or somehow get dropped from your policy, you probably never think about it. As a result of relentless consumer and regulatory pressure on insurance companies, auto rates in many cases have actually dropped in the last couple of years
The reality is, the insurance companies are banking on you doing this. In fact it wasn’t until very recently that car insurance companies began really competing for your attention to go out and shop again for your insurance.
Car insurance rates actually vary tremendously from company to company for the exact same car and person. The rates are typically just based on the insurer’s own experience so it can depend on who you have on the phone.
The easiest way to lower your auto insurance rate is to shop around and see what other companies are offering. You may be able to cut your premiums by hundreds of dollars just by switching companies. You should do this each year at renewal time.
Right now is a particularly good time to shop around for auto insurance because many major companies are in the midst of changing their pricing structure.
YOUR DRIVING HABITS AND HISTORY
In the past, car insurance companies based rates on a handful of variables such as your driving record, your age, where you live, where the car is typically parked, how many drivers in your house have access to the car, and where you drive including the miles driven annually.
Your car insurance rates, as you may have guessed, are all based on risk, and payout. In addition to all the variables mentioned above about your driving habits, the vehicle itself is factored heavily into the risk assessment.
THE VEHICLE YOU DRIVE OR ARE PURCHASING
Insurance companies calculate damage and theft claim payments for the car you’re considering, the cost of injury claims to passengers in that type of car, and claim payment amounts for damages that an identical car does statistically to other vehicles and their occupants, which sets the cost of your liability coverage.
YOUR CREDIT REPORT
Car insurance companies also looking more closely at how many miles you drive, and now study dozens of data points within your credit report, since insurers discovered that people with low credit scores are more likely to have claims than people with high scores.
Because of these changes, people with good driving and credit records and who drive statistically safe cars may be able to lower their auto insurance prices by up to 25%. Additionally, people who had bad driving records may finally be able to get coverage from a regular company, instead of getting rejected and shunned to a high-risk insurer.
IT’S EASY TO SHOP AROUND
In the recent past, shopping for car insurance required phone calls to multiple car insurance companies, and a lot of time spent on the phone. It sounds funny, but many of us just don’t shop that way anymore, nor do we have the time.
Although slow to evolve, many companies have finally stepped into the digital age and created online shopping tools. In fact you can go online, enter some information and get quotes from most insurance companies.
There are also independent car insurance shopping websites such as Esurance (disclaimer, they are owned by Allstate Insurance), insweb.com and I like the way Insure.com runs multiple quotes with only entering your information one time. You can go direct to a few insurers’ web sites, like Progressive, State Farm, Allstate and Geico to get quotes from them.
A few companies don’t sell through independent agents or on InsWeb. So you’ll need to go directly through the company’s Web site to get quotes from Geico, Progressive or Esurance. And some companies, including State Farm, sell only through their own agents.
You could also get help from an independent insurance agent who works with many companies. Some state insurance departments also publish rate comparisons; find links to your state’s site on our insurance page.
SAFE CARS COST LESS TO INSURE
Buying a safe car can also make a big difference in your auto insurance rate. You can look up a particular car’s cost to insure at State Farm’s vehicle ratings page, which shows you the car’s relative insurance costs in three categories:
- The damage and theft index grade (how its collision and comprehensive premiums stack up against vehicles in its price range)
- The liability rating index score (relative premiums for bodily injury and property damage liability)
- The car’s vehicle safety discount (the discount for medical payments or personal injury protection coverage, based on the cost of claims involving injury to the occupants of the insured car).
HIGHER DEDUCTIBLES SAVE MONEY
If you think you are a safe driver with little accident history, you may want to hedge your bets on your monthly payment by raising your deductibles on your comprehensive and collision coverage.
If you get in an accident or need to file a claim, you will pay a higher deductible such as $1,000 or more out of pocket, but you will save money in the long term with a smaller payment. Every year that you do not need o pay that deductible is money in your pocket.
Increasing your deductible from $250 to $1,000 can lower your premiums by 15% or more and make you less likely to file small claims that could cost you a claims-free discount.
The average age of cars on the road in America today is nearly 12 years old. If your car is that old and you are looking to save some cash, consider dropping the collision and comprehensive coverage and just keeping the liability. If the car is only worth a few thousand dollars, it is probably going to get totaled out anyway if it is involved in an accident, so you could save some serious money there. Dropping that part of your coverage can reduce your premium by one-third.
Insurance companies fro the most part do more than just insure cars. So to earn your business in other areas, consider adding in your homeowner’s policy, renter’s policy, business policy, and any other cars that you own into one policy. You can save up to 15% with a multiple-line policy.
If the young drivers in your family maintain at least a B average in school, if your car has special safety and anti-theft devices and if you don’t commute with the car and keep the annual mileage low, you might find some additional discounts there. You may also get up to a 20% discount if nobody on the policy has had an at-fault accident or moving violation within the past three or five years. The specific discounts vary by company and state, so ask each insurer you’re considering about the rate reductions you could qualify for.
IMPROVED CREDIT SCORES, MARRIAGE, ETC
If your credit score has improved recently, or you got married, this is also a great time to shop around as these factors all play into your insurance rate especially if you are a man.
You and your new spouse should consider teaming up into one policy. You can save about 10% to 30% on your car insurance by combining policies instead of maintaining separate ones.
YOU GET WHAT YOU PAY FOR
Remember, price isn’t everything and you get what you pay for. Always make sure the insurance company you choose has a good reputation.
AUTO BODY REPAIR SHOPS KNOW BEST
Want to know who deals with auto insurance companies all day and every day? Body shops! They know more about insurance in your area than some agents do. I always recommend that you ask your favorite or local body shop who the best insurance companies are in your area, because they work with insurance adjustors regularly and can probably tell you which firms have the smoothest claims process.
And of course, it’s important to find out if the company provides a level of service with which you are comfortable. For example, are you okay dealing with a call center or do you prefer a personal agent? Does the company treat you with respect and do its best to answer your questions, or does it seem more eager to close the deal and collect your money?
THERE ARE TWO KINDS OF AUTO INSURANCE BUYERS. WHICH KIND ARE YOU?
One of the secrets of the auto insurance world is that there are two types of customers; savvy ones who pay rates considerably below the norm, and those who get a quote from just one company and end up paying way more than they need to. Yet, with auto insurance rates, the savings to be had by doing a little comparison shopping can be huge – often hundreds, if not thousands of dollars!
So go on, shop again for a better rate.