The price you pay for your auto insurance can vary by hundreds of dollars, depending on what type of car you have, how many family members are drivers and the insurance company you buy your policy from. Since this is one of those household budget items that is unavoidable if you own a car on Long Island, here are some ways to reduce the cost.
Get at least three quotes. Call companies directly or access information on the Internet. New York State Department of Financial Services (DFS) offers a printable chart of major insurance providers and the discounts each company offers (www.dfs.ny.gov/consumer/auto/auto-ins-discounts.pdf).
You buy insurance to protect yourself financially and to provide peace of mind. It’s important to pick a company that is financially stable. Check the financial health of insurance companies with rating companies such as A.M. Best (www.ambest.com) and Standard & Poor’s (www.standardandpoors.com/ratings) and consult consumer magazines.
Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Others sell through independent agents who offer policies from several insurance companies. Some do not use agents. They sell directly to consumers over the phone or via the Internet.
Don’t shop by price alone. Ask friends and relatives for their recommendations. Contact DFS (www.dfs.ny.gov/insurance/cauto.htm) for information on consumer complaints by company. Pick an agent or company representative who takes the time to answer your questions.
Before You Buy A Car, Compare Insurance Costs
Car insurance premiums are based in part on the car’s price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. To help you decide what car to buy, you can get information from the Insurance Institute for Highway Safety (www.iihs.org).
Ask For Higher Deductibles
Deductibles are what you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Before choosing a higher deductible, be sure you have enough money set aside to pay it if you have a claim.
Reduce Coverage On Older Cars
Consider dropping collision or comprehensive coverage on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost-effective. Auto dealers and banks can tell you the worth of cars.
Or you can look it up online at Kelley’s Blue Book (www.kbb.com). Review your coverage at renewal time to make sure your insurance needs haven’t changed.
Buy Your Homeowners And Auto Coverage From The Same Insurer
Many insurers will give you a break if you buy two or more types of insurance. You may also get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce the rates for longtime customers. You may save money buying from different insurance companies, compared with a multipolicy discount.
Maintain A Good Credit Record
Establishing a solid credit history can cut your insurance costs.
Most insurers use credit information to price auto insurance policies. Research shows that people who effectively manage their credit have fewer claims. To protect your credit standing, pay your bills on time, don’t obtain more credit than you need and keep your credit balances as low as possible. Check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
Take Advantage Of Low Mileage Discounts
Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who car pool to work.
Ask About Group Insurance
Some companies offer reductions to drivers who get insurance through a group plan from their employers, through professional, business and alumni groups or from other associations. Ask your employer and inquire with groups or clubs you are a member of to see if this is possible.
Seek Out Other Discounts
Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also get a discount if you take a defensive driving course. If there is a young driver on the policy who is a good student, has taken a drivers’ education course or is away at college without a car, you may also qualify for a lower rate.
The key to savings is not the discounts, but the final price. A company that offers few discounts may still have a lower overall price. You should also be sure to ask about discounts for a number of other factors.
The Insurance Information Institute (www.iii.org) contributed to this article.