After years of
holding their rates steady-and in some cases even dropping them-many
of the top auto insurance companies have boosted rates this year,
including State Farm (6.9 percent), Farmers Insurance (6.9 percent)
and Allstate (8.9 percent).
Rising medical and
repair costs, higher jury awards and fraud have combined to put a
dent in auto insurance companies' dwindling cash reserves, experts
1990s, costs were starting to rise, but auto insurance companies had
the cash reserves-profits from the stock market-to keep costs from
being passed along to the consumers," said Nancy Kramer, a
spokeswoman for the California Department of Insurance.
reserves are depleted. "Auto insurance companies are telling us
that, based on their losses, they have to charge more or they'll go
out of business,'' she said. "Now, we're expecting some
consumer sticker shock," Kramer said.
aren't assertive, they could end up stuck with high auto insurance
But there's still
time to shave a few dollars off their auto insurance premiums by
comparison shopping and re-evaluating their current coverage.
Here are a few
ways to obtain cheap auto insurance
The deductible is
what you pay out of pocket before your insurance company pays
anything. Switching from a $200 deductible to a $500 deductible can
save consumers 15 percent to 30 percent on their collision and
comprehensive costs, he said. Up your deductible to $1,000, and
you'll save 40 percent to 45 percent.
and comprehensive coverage on old cars.
Why over insure
your clunker? Collision coverage pays the cost to repair or replace
your car if it is damaged in an accident, regardless if it was your
fault or someone else smashed into you. Comprehensive coverage pays
for other events that have nothing to do with collisions, such as
vandalism or car theft. But if you're driving an old or beat-up car
that's worth less than $1,000, it doesn't make sense to keep up the
coverage. In some cases, dropping it could save you $150 to $300 a
driving record clean.
Sounds like a
no-brainer, but good-driving discounts can shave about 20 percent
off your premium, according to the California Department of Auto
Insurance. To qualify for good-driver status, you'll need a clean
driving record for three years. That means you can have one point,
but no more. (Speeding tickets or an accident you caused typically
give you a point.) Ask about other discounts.
Many auto insurers
offer other discounts. Though the details vary from insurer to
insurer, you'll usually get a discount if:
You insure more
than one auto or have other policies, renter's insurance,
homeowner's insurance, etc., with the same firm. The more policies
you have, the more you'll save.
You are over age
50. Typically, insurers give drivers age 50 to 65 a discount. After
age 65, insurers may view drivers as more risky, so typically they
offer no discount.
A teenage driver
maintains a B average in school grades.
You are a teacher
or have an advanced degree in engineering, math or science. Actuary
history shows that people in these professions tend to be low-risk
Your auto is
equipped with an anti-theft device. Forget about those annoying car
alarms, though-most insurers only give a discount if you have
tracking system that alerts the police if your auto is stolen.
college student off your auto insurance policy.
If your college
student isn't going to drive the family car, let your auto insurance
company know. Young drivers are the riskiest, and if they won't be
driving your car, you don't need to insure them, Moraga said.
Pay for minor
You get a ding
that will probably cost you about $100 to fix. But is it worth
filing a claim? No, experts say. If it's small and you can fix it
without paying a lot, do it. Insurers look at how many claims
consumers file. There is no magic formula to tell you how many
claims are too many, but if you're not careful, you'll see your
rates go up-or, worse, the insurer won't renew your policy.
If you can cut
down on your daily commute, you'll pay less. Insurers look at how
many miles you drive and factor that into your rate. Again, how much
you'll save depends on the insurer. Taking the train, car-pooling or
even hopping on the bus will cut down on your mileage-and your rate.
Pick a safe
Yes, some vehicles
are considered high risk because of their safety record, so if
you're in the market for new auto, inquire about its safety record.
groups, such as the Highway Loss Data Institute, to find out if your
dream car is a popular target of auto thieves. In their latest
study, for example, the Highway Loss group found that Honda's Acura
Integra was at the top of their most-stolen new car list because of
demand for its parts.
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