How to Tune Up Your Auto Policy

If you haven't maintained your auto coverage, you could be paying too much.

Okay, you religiously change your oil every 3,000 miles, get regular tune-ups, and check and recheck your tire pressure. But when was the last time you gauged your auto insurance policy?

Now may be good a time to try to reduce those premiums. Maybe all you need are a few minor adjustments, or perhaps it's time to trade in your old policy for a more economical one.

Review your old policy

If you're happy with the way your current insurer handles claims and your premiums aren't increasing, stick with the company you have, says independent agent Clay Snellings of Snellings Walters Insurance Agency in Atlanta.

Staying with the same company for at least three years can bring discounts if your driving record is clean. Also, an insurance company likely will be more lenient on long-term policyholders if they have an accident or get a ticket. You'll miss out on these benefits if you jump from company to company chasing lower premiums.

Even if you're not thinking of switching insurers, you should review your policy at least once a year to make sure there are no gaps or overlaps in your coverage. For example, an auto policy's medical coverage might duplicate medical coverage you have through your employer. Liability amounts may meet state minimums, but may not be enough to protect your assets if you're sued. For more on building a solid auto policy see the "Smart Shopper's Guide to Auto Insurance."

Other money-saving moves include:

  • Special discounts. Update your agent on any changes in your lifestyle or your vehicle. For example, if you've moved closer to work or started taking public transportation you might be able to knock off added surcharges for daily commuters. Installing anti-theft devices and even quitting smoking might have an impact on your rates.
  • Boost your deductible. By increasing your deductible from $100 to $1,000 you might be able to shave as much as 25% from your annual premium (if you're financing the car you might be limited to a $500 deductible). But be realistic. Keep the deductible at a level you can afford.
  • Consider dropping collision coverage. If you have an older car -- like the one you gave your teen -- consider removing this optional coverage. The highest payout you can possibly get, minus the deductible, will rarely be worth the price if the car is worth less than $1,000 or if the insurance costs more than 6% of your car's value. Look up the car's value in the Kelley Blue Book, to see how much the insurance company probably thinks your car is worth.
  • Consolidate your coverage. You get a break for the second and successive cars covered by the same policy, so it's usually more economical to put all your cars on one policy. Similarly, consider using the same company for other policies. Some insurers offer discounts of up to 10% if you cover both your car and your home with them.

For more about keeping a lid on your premiums see "How to Get a Good Deal."

When it's time to shop around

If you believe your premiums are still too high, or if you have other problems with your insurer, it may be time to start shopping for quotes.

Premiums for the same coverage can be all over the map, so to be sure you're getting the best rates and services get quotes from several different companies.

Mary Bonelli of the Ohio Insurance Institute recommends checking with three sources for quotes:

  • The Internet
  • An agent who represents only one company -- such as State Farm or Allstate -- or companies such as Geico or USAA that deal directly with consumers
  • An independent agent who sells policies from several companies

Also, find out if your employer offers a group insurance policy, which might be cheaper than an individual policy.

Web sites such as and allow you to search for insurance quotes on your own time, but be prepared to answer a lot of questions.

Independent agents are in the comparison shopping business. By selling policies from several companies, an independent agent can recommend those that best fit your situation. The Independent Insurance Agents of America Web site can help you locate an independent agent in your area.

However, if you purchased your last policy from an independent agent don't assume that he or she will alert you to a better deal. Customers who want their agents to shop for better policies must ask.

When comparison shopping on your own, be sure to provide the same information to each company or agent. And to get a more accurate price comparison, make sure you ask for the same coverage. Jeanne Salvatore, spokeswoman for the Insurance Information Institute, recommends visiting agents whenever possible to get a better sense of how they do business.

For the lowest rates, ask about discounts for such things as vehicle safety features, driver training or a clean driving record. Just don't try to lie your way into a cheaper policy. Insurance companies can and will access your driving records.

Check out the company

In your search to save money, don't forget to find out about service, the company's complaint history, and if its a smaller insurer you're not familiar with, its financial stability.

Once you've narrowed your search to a couple of prospective policies, contact your state insurance department to find out the following:

  • Is the company licensed in your state?
  • Is the agent licensed in the state?
  • How does the company's complaint ratio compare with its competitors?

    Some states do not gather or release complaint information. To quickly find out what's available in your state, visit's Complaint Finder.

Your final evaluation should focus on the company's financial stability, says Salvatore. She recommends checking with the insurance rating firms A.M. Best (search for a company; about the ratings) and Standard & Poor's (search; about the ratings).

Finally, don't cancel your current policy until your new one has started. Once you've signed with a new company, let your previous insurer know the date you're planning to switch coverage and ask for a cancellation request form.

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