Drivers Struggle With Rising Car Insurance Rates

By Insurance.com Posted : 12/17/2008

Save Money on Car Insurance by Maintaining Good Credit and Keeping Policies Current

CLEVELAND, OHAuto insurance rates continue to rise, adding pressure to cash-strapped consumers. Some drivers are letting their car insurance policies lapse, by either not renewing on time or failing to pay their bills, according to Insurance.com. In light of this worrisome trend, the company is urging drivers to explore payment options with their carriers—rather than go without car insurance.

"Every day we're hearing from consumers who let their car insurance policies expire—by either not paying their bills on time, or allowing a gap between the end of their current policy and the time a new policy is acquired," said Sam Belden, Vice President at Insurance.com, the leading online independent auto insurance agency in the United States. "Not only is this dangerous, it also ends up costing drivers with lapsed policies thousands of dollars when they go to get car insurance again. Having a lapsed policy can be a red flag for insurance companies."

Insurance.com offers these recommendations for protecting your rates and your credit.

“Having a lapsed policy can be a red flag for insurance companies.” —Sam Belden–Insurance.com Vice President

1. Avoid a Lapse in Coverage—Never ignore your car insurance bill. Driving without insurance is against the law and you'll be personally liable if you have an accident. And, a short-term decision like letting your policy lapse will have big, long-term consequences—your rates may be 25 to 50% higher.

2. Explore Payment Options—Many carriers offer discounts of up to 15% if you pay your bill all at once. If you're not able to afford that lump sum payment, ask your company about monthly payment plans. There may be a small fee for such a payment plan, but some carriers will waive that fee if you elect to pay by Electronic Funds Transfer, which automatically withdraws your car payment at the designated increments.

3. Make a partial payment—If you cannot afford to pay your entire insurance bill, talk to your company about making a partial payment when your payment is due. Some companies will continue your coverage, as long as you pay something—but others may require full payment. There's no harm in asking if a smaller payment will keep your policy in force.

4. Get a New Policy—If you have not shopped for car insurance in several years, now may be a good time to compare rates. New customers reported an average annual savings of $595 when they shopped and switched carriers at Insurance.com.

5. Protect Your CreditMissed payments can lower your credit rating, making it more expensive to get car insurance coverage in the future. If a credit card company or department store offers deferred billing, look carefully at the terms, so that you're not in deeper debt in the New Year.

For those who are resolving to save more money in the New Year, Belden also noted that auto insurance policies can be an easy – but often overlooked – source for savings. "Many consumers are unaware of the numerous discounts offered by their insurance carriers, discounts that add up to hundreds of dollars a year in lower rates," he said. "Particularly in this economy, drivers should regularly review policies to see if they qualify for lower rates." Such discounts include:

  • Low Mileage discounts if you drive less than 10,000 miles each year.
  • Hybrid discounts if you’ve recently purchased an eco-friendly car.
  • Early shopping discounts if you renew two weeks before your policy expires.
  • "Good student" discounts for high school and college students with a B or better average.
  • Defensive driving course discount if you’ve taken a class within 3 years.

Insurance.com's 3rd Quarter RateWatch for Car Insurance found that the lowest car insurance quotes, on average, were up 3% over the previous quarter, rising from $1893 per year to $1949 per year. In a prosperous economy, the hike might be shrugged off or even overlooked entirely by consumers. However, with the holiday shopping season approaching and consumers facing high grocery bills, energy costs and job losses, Insurance.com predicts that more drivers will be looking for ways to save.

Insurance.com is the leading online independent auto insurance agency in the United States. Our innovative technology allows consumers to link directly to the rating systems of more than a dozen top insurance companies. We streamline the shopping process for consumers, empowering them to instantly compare rates and make the smartest decisions for their insurance needs. Since 2000, millions of drivers have benefited from using our online shopping experience or speaking with our expert, licensed agents by phone. Headquartered in Solon, Ohio on the outskirts of Cleveland, Insurance.com also offers information for life, health and home insurance.

Media Contacts:

Sari Martin/Susan Hartzell
Sari.martin@icrinc.com, 203-682-8345
Susan.hartzell@icrinc.com, 203-682-8238

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