Three Ways to Lower Your Car-Insurance Premium
Auto-insurance premiums dropped last year for the first time since 1999, but only by an average of 1 percent. So getting that lower rate might still mean work. We looked at how insurers are calculating premiums these days — even your credit score can matter — and compiled a few tips.
Shop Once a Year
A little research can go a long way. Bob Hunter of the Consumer Federation of America suggests checking price ranges on your state insurance commission’s Web site. If you’re working with an insurance agent, he adds, ask him to match online price quotes, which are typically lower. No-frills insurers are another good starting place; InsWeb.com lists some.
Fess Up
Late credit card payments and where you park your car can now boost your price. But insurers will factor in other details in your favor. Teens, for instance, get discounts off their Read more
Insurers Offer Low-Mileage Discounts
Car owners who are changing their driving habits because of soaring gas prices may be able to save a few dollars on auto insurance.
Major car insurers including State Farm Mutual Insurance Cos., Travelers Cos. and Farmers Insurance Group say that drivers who log less than about 7,500 miles a year may be eligible for “low mileage” programs that reduce premiums an average of about 10% to 12%. State Farm’s program earns drivers discounts ranging from 12% to 18%, says spokesman Dick Luedke.
Car owners who drive more than that but less than they used to — perhaps because they have started using public transportation or walking to work — may also save on premiums, according to a study by the Consumer Federation of America. The group released a study Tuesday showing consumers could save 5% to 15%, amounting to $47 to $142 a year based on 2005 rates, when the average U.S. premium was $949, by cutting their mileage enough to drop into a different ratings category, say, from “drive to work” to “pleasure driving,” says J. Robert Hunter, insurance director for the Consumer Federation of America.
“Most insurance companies have a scale, and you pay more based on how much you drive. Each time you drive more, they charge you more,” Mr. Hunter says. Depending on ratings factors allowed by state regulators, the savings can be even greater, he says. Read more