A good driving record and good claims history are paramount for getting car insurance cheaper.
A solid credit history can lower your car insurance costs as well and is also paramount for getting car insurance cheaper.
THE KEY TO SAVINGS also includes DISCOUNTS;
BUT remember, THE COMBINED INSURANCE COMPANY VALUE and COVERAGES
for your specific needs are of most importance.
An insurer that offers fewer discounts may still have a lower overall price for the same insurance coverage value; that’s why it always pays to get at least 3 comparisons after you’ve done your homework. Review these important facts with your car insurance agent.
Listed below are important factors in lowering car insurance costs:
1. SHOP AROUND FOR CAR INSURANCE
Prices vary from car insurance carrier to car insurance carrier in Texas, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. The Texas Department of Insurance provides comparisons of prices charged by major insurers. (The Texas Department of Insurance or TDI is readily available on-line at
http://www.tdi.state.tx.us/)
You buy car insurance in Texas to protect yourself financially and provide peace of mind. It’s important to pick a carrier 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’ (the stated price for the service of offering insurance coverage to you) from different types of car insurance carriers. Some sell through their own agents. Some sell through independent agents who offer policies from several car insurance companies. Others do not use agents; they sell directly to clients over the phone or via the Internet.
Don’t shop by price alone. Make sure you understand the ‘Insurance Coverages’ being offered, their value and how coverages make a huge difference if you have a claim. Ask friends and relatives for their advice and recommendations. Contact The Texas Department of Insurance to find out whether they provide information on ‘Consumer Complaints’ by company.
Pick an agent or insurance company representative that takes the time to answer your questions and explains car insurance. Make sure you understand the ‘Insurance Coverage’ being offered.
2. MAINTAIN A GOOD DRIVING RECORD
Car insurance companies offer their best discounts to drivers who have not had any accidents or moving violations for a number of years. In Texas (for example) insurance companies have a way of looking at your ‘driving record’ through the Texas DMV (Department of Motor Vehicles). So if you attempt to get a quote on-line, through an insurance company or an agent and you don’t supply your correct driving record, your quote will not be valid.
Once an insurance company checks your driving record (and all insurance companies do) they will notify you of any error in their Quote to you or in Premium (the amount you pay for your car insurance) being charged to you; so if you purchase insurance from an insurance company based on a quote you received from them your insurance premium may be increased to reflect the number of accidents and moving violations within a 3 to 5 year period depending on the insurance company’s guidelines.
3. MAINTAIN A SOLID CREDIT HISTORY
Establishing a solid credit history can lower your car insurance costs. Almost all insurance companies use credit information to price car insurance policies these days. Research shows that people who effectively manage their credit have fewer claims. You should check your credit record on a regular basis and have any errors corrected promptly so that your record remains accurate.
4. BEFORE YOU BUY A CAR, COMPARE INSURANCE COSTS FOR THAT CAR.
Before you buy a new or used car, check into car 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).
5. BUY YOUR HOME INSURANCE (OR RENTER’S INSURANCE) AND CAR INSURANCE COVERAGE FROM THE SAME INSURANCE COMPANY.
Almost all insurance companies will give you a discount if you buy two or more certain types of insurance coverage from them. It’s called a ‘Companion Policy Discount’ when you combine in your purchase of insurance two or more certain types of insurance.
For example: If you buy Home Insurance or Homeowners Insurance (as it is known) and Auto Insurance from the same insurance company you may be eligible for as much as a 15% discount on the structure of your Home and a 15% discount on your Auto as well.
You may also receive a discount if you have more than one vehicle insured with the same company on your Auto Insurance Policy. It’s called a ‘Multi Car Discount’.
6. ASK FOR HIGHER DEDUCTIBLES ON YOUR CAR INSURANCE.
Deductibles are what you pay (your out-of pocket expense) before your car insurance policy kicks in after certain covered losses. By requesting higher Deductibles, you can lower your Premium substantially. For example: increasing your Deductible from $200 to $500 could reduce your Collision and Comprehensive Coverages cost. Requesting a $1,000 Deductible could save you even more. Before choosing a higher Deductible, be sure you have enough money set aside to pay the Deductible if you have a claim, (it’s the portion you owe).
7. REDUCE COVERAGE ON OLDER CARS
Consider dropping collision and/or comprehensive coverages on older cars that no longer have a loan on them. If your car is worth less than 10 times the insurance 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 car insurance coverage with your agent at renewal time to make sure your insurance needs haven’t changed.
8. IS YOUR AUTO USED FOR WORK OR PLEASURE
Insurance rates are affected by how you use your car. Know the classification of your vehicle(s). Do you use your car to ‘Commute’ to and from work? Is one of your cars used strictly as a ‘Pleasure’ vehicle? Do you use your car for ‘Business’ (such as a Realtor)? There are several factors here that may affect your Premium, so be sure and review this important distinction with your agent.
9. SEEK OUT OTHER DISCOUNTS
Car insurance 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’. You may qualify for a lower rate if there is a young driver on your policy who is a good student (A/B Honor Roll), has taken a ‘Drivers Education Course’ or is Away at College (100 miles or more) without a car.
When you comparison shop, inquire about ‘Discounts’ for the following:
- Auto and Home Coverage with the Same Company (It’s called having a ‘Companion Policy’)
- Good Driving Record (No Accidents in 3 to 5 Years; No Moving Violations in 3 to 5 Years)
- Solid Credit History
- More than 1 car on the same car insurance policy
- Higher Deductibles
- Defensive Driving Courses
- Drivers Ed Courses
- Student Drivers with Good Grades
- College Students away from Home
- Anti-theft Devices
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Disclaimer: Content and illustrations represented and provided here-in are for informational purposes only. This information should not be misconstrued to be considered Insurance or Binder Coverage for Insurance. Always consult a licensed insurance agent in the state of Texas for specific insurance coverage types and needs analysis as insurance policies in Texas vary.
Sources used to gather content for this Article and all Articles provided in this Series include:
The Costlow Insurance Group, Inc. /
www.costlowinsurance.com
a. The Insurance Information Institute /
http://www.iii.org
b. The Texas Department of Insurance /
http://www.tdi.state.tx.us
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