When you ask insurance expert Alex Hageli to list the five best ways to get lower car insurance rates, he's got a quick answer:
"Shop around," he says.
And the other four?
"Shop around, shop around, shop around and shop around," he says. "For the life of me, I don't understand why people don't shop around more. When people get different car insurance quotes, they save money. I can't tell you how many times I've heard people who have shopped around say, 'I can't believe I saved a couple hundred bucks.'"
Hageli is the director of personal lines policy at the Property Casualty Insurers Association of America, so he knows what he's talking about. He also practices what he preaches. He gets at least three quotes for auto insurance once a year -- and even then he considers himself lazy.
"I should be getting quotes on auto insurance every six months," he says.
Why you should compare car insurance quotes
The Insurance Information Institute also recommends that you compare car insurance quotes from at least three companies, and other experts recommend that you also sample different types of companies, from those who only sell policies over the phone or the Internet to those who maintain offices with agents representing their company. It might also pay to contact an independent agent who sells policies for several different companies.
Another option: Check with your state's insurance department. Some provide price comparisons from major auto insurance companies.
Hageli advises that you check your credit report for errors and have them corrected before seeking cheap car insurance quotes. Your insurance risk profile is largely based on your credit history, so erroneous credit activity can cost you.
He also recommends you check your C.L.U.E. (Comprehensive Loss Underwriting Exchange) report, which is a record of claims that you've filed for a vehicle or home. Your credit report is available for free at annualcreditreport.com, and your C.L.U.E. report is available from LexisNexis. You have a right to a free C.L.U.E. report every 12 months.
Buy the right vehicle to save on car insurance
Even before you purchase a vehicle, check out how much it's going to cost more in comprehensive and collision coverage. Expensive cars cost more to insure because they cost more to repair or replace. Convertibles and sports cars also typically cost more to insure.
On the other end of the spectrum, minivans and medium-sized SUVs are often among the cheapest vehicles to insure.
Car insurance discounts for safety features can help reduce your premium, so consider buying a vehicle with the following features:
Maintain a good driving and credit records
If you're shopping around for an automobile insurance policy, be aware that a new company will likely check your driving record and see whether you've had any recent speeding tickets or other activity that signals higher risk. Your existing company may not be aware of those tickets and may not check for them if you're just renewing a policy.
In general, though, your history of tickets, accidents and any incidents of driving while intoxicated will have a big impact on your insurance premiums, so stay on the straight and narrow. Consider not filing claims for small events that might trigger future premium increases.
You can also ask your existing insurer to rerun your credit report if you think your history has improved, Hageli said. Most insurers won't raise your rates if your score has worsened.
In addition, if you park in a covered garage or a locked parking lot, mention that when getting auto insurance quotes. These perks reduce the chances your insurer will have to pay a theft claim, which could reduce your car insurance rates.
Reduce some of your coverage
If you own your car outright and it's an older model, you can save money by dropping collision or comprehensive coverage. Collision coverage pays for repairs to your car if you have an accident, and it's not required by law. One rule of thumb: If the car is worth less than 10 times your premium, collision insurance may not be worth the expense.
If you don't want to be saddled with the full repair bills in the event of an accident, you can still lower your rates by increasing your deductible, which is the amount you have to pay before your auto insurance kicks in.
The Michigan Office of Financial and Insurance Services recommends that you compare the medical coverage in your auto insurance to your health insurance so that you're not duplicating coverage.
Poke around for obscure discounts
Come right out and ask your insurance agent about any other discounts for which you might be eligible. Find out about consolidating your auto and home insurance policies with one insurer in order to get a multiline discount. Here are some other ways to save:
Although you are looking for ways to save money, you may not want to shop on price alone. Before switching from a respected company that's been prompt, fair and reliable over the years to a new company, seek feedback from friends who have had auto insurance coverage with the new company to find out what their experience has been.
Jim Sloan is a freelance writer in Reno, Nev.
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