How to save on auto
insurance can't be taken for a test drive. But you can get a good deal -- if
you shop around and take some steps you might not have considered.
See, you don't just buy auto insurance. You actually buy several
different types of insurance: collision, comprehensive, uninsured motorists,
bodily injury and so on. Some states mandate certain insurance, and of course,
lenders require coverage -- until the car's paid for, it's their investment
Sure, an insurance agent can help you with these figures. But
remember: The more insurance you buy, the more commission the agent gets. So
it's better to work this one out yourself. Learn more about different types
of auto insurance, and figure out how much you can live with by reading "car
Additionally, you can save money just by comparison shopping.
Though Americans love to shop around for cars and drive several blocks to save
a few cents on fuel, few U.S. drivers bother to comparison shop for auto insurance.
In fact, the latest survey of consumers by Progressive Insurance found that
only 20 percent shopped around for auto insurance. Progressive's study also
asserts that the cost of a six-month auto insurance policy for the same driver
with the same coverages varies from company to company -- the difference can
vary $500 or more.
So, don't just go with your father's insurance company, or the
first one you see in the Yellow Pages, or even the same one you've been using
for years. Shop around when you buy a new vehicle and compare the rates again
about once a year.
You can shop the old fashioned way. Call three or four local agents,
giving each of them your driving details. The Web, with its database and searching
capabilities, offers newfangled ways to shop for insurance, but it doesn't always
save time over calling.
Whether you shop by phone or by Web, give the exact same details
to three or more companies and you'll end up with a range of quotes. Should
you simply pick the least expensive? Not quite. You want to make sure this insurance
company doesn't just cost less, but also provides the appropriate service if
you file a claim. For this reason, some people are willing to pay more for a
"name" insurance company. You can check an insurer's claims-paying ability at
& Poor's Ratings Service: Insurance. No one likes to buy insurance --
it's a product that's best when never used. But keep thinking about that $500
and suddenly a few minutes of insurance homework don't hurt so much.
Although shopping around for auto insurance is the No. 1 tip,
it's not the only one. Here are eight more ways to save -- including a few you
may not have considered before:
- Get married and get older.
- Take a defensive driving course.
- Ask about membership discounts, because they're not always
going to volunteer it.
- Install a car alarm.
- Pay six months in full, twice a year, rather than financing
- Buy a car with safety features such as anti-lock brake
system, alarm and air bags.
- Move to a "better" ZIP code. Areas where there
are more uninsured motorists and more wrecks get slapped with higher rates.
- Keep your driving record clean so your insurance company
is never tempted to raise your rates.
-- Updated: Oct. 14, 2003