Lower Your Auto Insurance Costs

Image by shainelee via FlickrI remember listening to a talk radio program on the AM dial about a year ago where the host stated that he chose not to participate in the economic recession.  Now he spends a good portion of his program showing empathy to his listeners who have been affected by the economic downturn.  No matter where we live, our neighbors are tightening their belts, spending less, and pinching their pennies.  As a father of five young children, I find myself doing the same.  Here are some ideas that may help you save money on car insurance without having to shop around.

Automobile insurance premiums often take a big bite out of a family’s budget. You may, however, be paying too much for this coverage. The following are several approaches you can use to reduce your auto insurance costs.

• Choose higher deductibles, particularly if you currently have a low collision or other-than-collision deductible, such as $100 or $250. Increasing your deductible from $250 to $500 or $1,000, for example, can reduce your collision and other-than-collision premium by 15 to 35 percent.
• Eliminate collision and other-than-collision coverage on older, less valuable cars. If your car is worth less than $1,500, it may be wiser and cheaper in the long run to just retain this physical damage exposure. Used car valuations are available online at Kelley Blue Book.
• Maintain an excellent credit record, since insurance companies are increasingly using credit scores to price auto insurance policies. Consumers with poor credit often pay more for auto insurance. 
• Buy a “low-profile” automobile. Before you purchase a new or used car, check into the auto insurance costs. Automobile models that are expensive to maintain and have higher theft and collision frequency rates tend to have higher insurance costs. 
• Take advantage of multipolicy discounts by keeping your homeowners and auto policy with one insurer. Likewise, take advantage of multicar discounts by having all autos on one insurance policy.
• Seek out other auto insurance discounts (which can vary by state and by insurance company), such as defensive driving, good student, low-mileage auto, alcohol awareness training, air bags, antilock brakes, claim-free experience, and long-term customer. 

REDUCING AUTO INSURANCE FRAUD

The insurance industry calculates that property and casualty insurance fraud costs our society over $30 billion annually. According to some estimates, this insurance fraud adds about $200 to $300 annually to total insurance premiums for the average household. Auto insurance fraud accounts for a large segment of these losses, which are ultimately passed on to you, the auto insurance consumer, in the form of higher automobile insurance premiums.

Auto insurance fraud can occur in a variety of ways. For example, unethical groups of doctors and lawyers can team together to overtreat patients and thus exaggerate claims. Staged accidents are also a common problem, in which a conspirator’s car pulls in front of an innocent driver’s automobile and stops suddenly. This causes the innocent driver to rear-end the conspirator’s ve-hicle. Thus, the innocent driver often believes he or she is negligent. Typical victims are usually driving alone in new and expensive vehicles. In many cases, the criminal driver uses a large, older sedan with several passengers inside.

There are several ways by which you can avoid becoming a victim of these “staged accidents,” including the following.

• Avoid tailgating at all times and focus on driving defensively.
• Obtain the names and driver’s license numbers of all occupants in the other car.
• Attain the names and key information of witnesses.
• Report your suspicions to your insurance agent immediately.Preview

In addition, auto insurance companies emphasize several key steps drivers can take to fight auto insurance fraud in general, including the following.

• Be aware of all the various ways in which auto insurance fraud can occur. Your agent is a good source for this information.
• If you believe you are a victim of auto insurance fraud, report your concerns to your agent.
• Communicate with your legislative representative about this issue and request new laws to assist the fight against automobile insurance fraud.