Auto Insurance Tips

1. As you are researching insurance companies to purchase auto insurance from, make sure that your first educate yourself on your driving record. To get an initial estimate, insurance companies will ask you to remember the number of tickets and accidents you have had in the last x-number of years. The number of years that an insurance company looks back changes from company to company. Therefore, if you have a poor driving record five years ago, but in the last three years you have improved, look for a company that adjusts rates according to a three-year record. Also, companies use a CLUE (Comprehensive Loss Underwriting Exchange) report from Equifax to determine your rates. You can purchase one, and you might consider it as you are shopping around for insurance companies.

2. Purchasing a car brings up many questions about how your insurance will be affected. If you are using a loan, most lending institutions require that you purchase both comprehensive and collision. Insurance companies take a vehicle’s safety features and the cost of repair into consideration when they are setting insurance premiums. Generally, the vehicle that has the most safety features and that would be the least expensive to fix would be the car with the lowest premium. Using this criteria, exotic cars would be the most expensive to insure because of the cost of repairs if the car was damaged. However, sedans would be the least expensive because they are reasonable to fix and have many safety features.

3. When you get married, think about combining all of your cars and your spouse’s cars onto one policy. Holding one policy may be less expensive than holding two separate ones because of the discounts that could be available. Check with your carrier to see whether they offer discounts if you insure multiple cars with them. Some insurance companies also lower insurance premiums for males under the age of twenty-five who are married (males generally are not as aggressive when they are married, and less aggressiveness results in fewer accidents and speeding tickets).

4. The theft of a car is a traumatic experience. In case of theft, you should keep copies of your license, registration, and insurance in your home. Also, if you have updated your car (adding stereo equipment, new tires, etc.), you should keep receipts of those purchases. You should also have some sort of security system on your cars (most new cars come with these systems installed; such systems also lower insurance premiums). If your car is ever stolen, you should contact the police first and then your insurance company. Your insurance company should work quickly to get you into a rental car while the police are investigating.

5. Personal injury protection is coverage that pays for the medical or funeral expenses of you or your family if you are injured in an auto accident. Personal injury protection is a smart addition if you have poor health and life insurance. However, if you have health and life insurance policies that would offer sufficient coverage in the event of a fatality, personal injury protection is an additional coverage that is not needed. If you are looking at reducing your rates and you already have medical coverage from another source, you could reduce the amount of personal injury coverage on your auto insurance policy.

6. Uninsured and underinsured motorists protection is essential to your insurance policy. Uninsured motorists insurance is required in several states, and it covers bodily injury when an accident occurs with an uninsured driver or a driver of a stolen car. It also covers hit-and-run accidents. Underinsured motorists coverage pays the balance of medical costs up to the policy limit when the at-fault motorist’s insurance is insufficient to pay for all of the costs. Because of the prevalence of uninsured and underinsured motorists, you should purchase a high limit of uninsured and underinsured protection as it will, in the end, cost much less if an accident occurs.

7. Adding teenage drivers to your insurance is an expensive proposition. As you are considering purchasing insurance, consider a few factors: first, females generally cost less than males to insure; second, shop around for insurance companies that offer discounts for driver’s education classes, good grades, and driving logs; third, as you are insuring teenage drivers, your premiums will be lower if the drivers are occasional drivers; fourth, teenagers have a high accident rate, so consider purchasing high liability coverage and lower comprehensive coverage; and fourth, the type of car teenagers drive—whether it is new, sporty, or exotic—will also determine the premiums.

8. When you are purchasing auto insurance, consider paying the complete premium when you sign up. Insurance companies generally offer discounts for those that pay the premium up front opposed to over a period of months. Paying in full at the beginning of the insurance period reduces an insurance company’s administrative costs in processing and checking your payments on a monthly basis. Paying up front is the most economical option.

9. Motorcycle insurance can either be purchased through a company that specializes in motorcycle insurance by creating another insurance policy, or it can be purchased through your auto insurance company. Many auto insurance companies offer motorcycle insurance. A miscellaneous category on the policy can insure motorcycles, mopeds, and motor homes. Adding motorcycles onto an existing policy can be more economical than creating a new policy. Also, if you do not ride your motorcycle in the winter, reduce your coverage for the motorcycle during that season. If you are not going to be riding it, why purchase expensive coverage?

10.If you have a child visiting for a period of time and that child would like to use your car, you should check with your insurance company about whether you should add your child back onto your insurance policy. Personal insurance policies cover you, your family, your friends, and any of your associates that drive your car and do so believing that you would have permitted them to drive it. In the case of a child using a car on a consistent basis over an extended period of time, you should check with your insurance company to see how many consecutive days a child would need to drive a car before adding that child onto your insurance.