Auto-insurance premiums have long since reached big-ticket status, so it pays to look for opportunities that will keep your costs down without sacrificing protection. Here are some things you can do:
See Also: Smart Shopper's Guide to Auto Insurance
Do Some Homework
Posing as ordinary buyers, investigators with the Pennsylvania Insurance Department once visited 186 insurance agencies in three cities. Of the 92 Philadelphia agents contacted, fewer than 30% volunteered information on discounts and deductibles that could have reduced premiums 20% to 40%.
The lesson: Arm yourself with as much information as you can before you start calling companies. You'll find that some kinds of information are easier to get than others. It is fairly easy to solicit cost, coverage and deductible information from auto insurers; it's much more difficult to find out their financial stability and service record — things you'd be interested in knowing if, for example, you get a good cost quote from a company you're not familiar with.
You can check out stability in Best's Insurance Reports: Property-Casualty — insurers with the top two ratings can be considered solid. (You can also ask an agent how A.M. Best, the rating service that publishes the above guide, rates his or her company.)
Also contact your state insurance office; many of them keep track of consumer complaints and will share the results if they're asked. You can also look up consumer complaint ratios on their websites or through the NAIC's consumer resources, at NAIC.org. (Links to state insurance office websites can also be found there.) Finally, read through your policy carefully so that you're sure of the kind and amount of protection you have.
Compare the Premiums
Survey after survey confirms that auto-insurance companies often charge greatly different premiums for the same coverage. In New York, Pennsylvania and elsewhere, premiums have been shown to vary sometimes by more than 100%.
Rates may not vary as wildly in your area, but the odds are you will discover substantial differences if you take the time to get premium quotes from a number of companies. Begin by checking out InsuranceRates.com, where you can get quotes from several insurers.Then check out sites for State Farm; Allstate; Progressive; Geico and others. These quotes can act as a measure against which to judge identical coverage rates at different companies. If you'd like individualized help, you can work with an independent insurance agent — you can find one in your area at IIAB.net
Many state insurance offices distribute auto-insurance pricing guides, but the categories they use may not match yours. Your best bet is to use such a guide to identify your state's most cost-effective insurers. Then get price quotes from a handful and you'll have a truly comparative guide.
Manage Your Teenagers' Driving
Young drivers pay much more than most others because, as a group, they have more accidents. Rates will drop several notches when they reach age 25 or marry. Most companies give good-student or driver-education discounts to young drivers — commonly 5% to 25% off for a consistent B average — because statistically, good students are superior drivers. Young drivers can also get discounts for completing an approved driver-training course. The parents of students who spend part of the year at a school more than 100 or 150 miles away from home (and away from the family car) may also get a break.