Having bought a car at the weekend, I also needed to arrange car insurance. The law in Britain now requires all cars that are used on public roads to have a valid insurance policy; if you don’t, then you must park the car off-road and submit a SORN. If your car is found on a public road, parked or moving, then you can be fined. So I needed to have a policy in place before I would be able to drive the car away. Like many things, buying car insurance can be simple and quick, but if you’re prepared to put some effort in, you can bring your premiums down significantly. I can wholeheartedly recommend the advice on MoneySavingExpert.com which gives some tips on how to reduce your premiums by tweaking the information you provide. I would advise you to read the whole article, but here are the things I tried that worked for me.
1. Trying multiple price comparison web sites
It’s hard to avoid the various price comparison web sites that advertise nowadays. Whether it’s the one with the meerkats, talking robots or annoying opera singer, these sites are well-advertised. They work by taking your details, and obtaining quotes from a range of insurers on your behalf, which are then ranked to show you the cheapest. The sites make their money from the referral fees that insurers pay when you take up a policy. Considering how much these sites advertise, they must make a lot of money from these referral fees. It’s worth trying multiple sites, as different sites work with different insurers. I got different results from each. You can also usually get cashback if you click through to a price comparison web site from a cashback site like Quidco (referral link) or Topcashback (referral link). I got about £2 from them, just for getting a quote.
2. Go direct to insurance companies
Once I’d found the cheapest insurer – and the three comparison sites I tried all gave the same company – I also tried to get a cheaper quote by visiting their site directly. Again, going via a cashback site may net you cashback as well. Remember those referral fees? Cashback sites pay those to you. It’s also worth checking Aviva and Direct Line, who do not advertise their policies on price comparison web sites. As it happens, both gave me unaffordable quotes that were nearly double the cheapest that I could find, but, worth a try.
3. Tweak your job description
I have a rather unique job title of ‘Student Recruitment and Data Officer’, which isn’t on the selection lists that insurers ask for. Originally I put it through as ‘Recruitment Consultant’ working in state education, but I found changing it to ‘Administrative Officer’ in the university sector lowered my premiums significantly (by about 20% in my case). As long as the title still accurately reflects your job role, you should be fine.
4. Add another driver
As Christine hasn’t passed her test yet, it was going to just be me on the car’s insurance policy. However, we found that adding another family member to the policy, as a secondary driver, reduced my quote by another 10%. To be effective, this must be someone that would realistically be likely to drive the car, and who has a good driving record with no penalty points or recent insurance claims. Adding an irresponsible or inexperienced second driver may increase premiums, but it’s worth trying.
5. Include some business use
If you think adding another driver is a bizarre way to reduce your premiums, here’s one that seemed even weirder. I will need to drive for work from time to time (I reckoned no more than 1000 miles per year) and so I included this in the policy. This means that I won’t need to arrange a hire car, so my employer also saves money too. After getting quotes with this included, I tried taking it out and stating that the care would only be for ‘leisure’ use (no commuting and no work-related activities). That actually pushed the premiums up by about 10%, so I put it back in.
Plus the things that I didn’t try
I didn’t try everything. I could have got an even cheaper policy if I had opted in to a ‘black box’ insurance policy. This involves the fitting of a recording device to your car that monitors your location and how you drive – and if you drive safely, you’ll save money. InsureTheBox is one of the better known firms that offers this (a friend works for them), but it’s available from a variety of insurers. Sometimes, opting for third-party insurance can be cheaper, but it covers less than fully comprehensive insurance which could leave you out of pocket in the event of an accident. And, again bizarrely, sometimes comprehensive cover is cheaper than third-party because of risk factors. And if you have another type of policy with an insurance firm (say home or travel insurance), some insurers may give you a discount if you take out more than one policy from the same firm. Our home insurance was arranged via a broker when we got our mortgage so I wasn’t able to approach them for a car insurance quote on this occasion.
In the end
As it happened, the cheapest quote I got was via Confused.com, for Diamond insurance – a company that historically only covered female drivers. Both are owned by Admiral Group, incidentally. Overall, the policy ended up being about £200/year cheaper than when I started, which isn’t bad for a couple of hours spent entering information into various web sites. Insurance for new drivers is always expensive and I’m hoping that, should I continue to drive like Captain Slow, my premiums should come down in future years.
There’s no getting away from it: Car insurance for 17 year olds is expensive. The simple fact is the youngest drivers on our roads are statistically more dangerous, owing to their understandable lack of experience behind the wheel.
This guide is aimed at 17-year-olds who have just passed their test, but includes tips about the cheapest cars to insure that will be relevant to any young motorists. If you are a young driver trying to get on the road, it’s not all doom and gloom. There are some things you can do to help yourself:
Take an advanced driving course, like PassPlus, Btec Level 2, IAM, or RoSPA. By getting extra skills and experience, you’ll be making yourself a safer driver and young drivers can often save much more than the cost of the course on their first insurance premium.
Make your policy work for you. Take a limited mileage policy if you can commit to driving less than, say 1500, 3,000 or 5,000 miles a year. Another money-saving method is installing a black box into your car, which will measure your mileage and reduce your premium.
Joining a car owners club can drop your premium by up to 15%.
Keeping your car in a safe place, for example the garage or driveway, and improvingsecurity features, such as fitting an alarm, will decrease the risk of theft and keep costs down.
Add a parent with driving experience onto the policy to further reduce your premium.
So far, so good, but there are some factors you can’t, or are unlikely to change. You can’t make yourself any older, and you probably don’t want to move house just to get cheaper car insurance. So that leaves the car that you choose as the main factor in determining the price you will pay.
The best cars for young drivers
So what is the most affordable car to insure? We did some research into cheap first cars and the result may surprise you. The top 3 low insurance cars are:
1974 Citroen 2CV6
1992 Fiat Panda
1959 Ford Anglia
The cheapest cars to insure, for a teenage driver, are the classic motors. They may not have Bluetooth, automatic lights or even electric windows, but they do have a lot of character. At Adrian Flux we say the older the better when it comes to affordable insurance for young drivers! However our research into the cheapest cars for young drivers isn’t just a list of bangers, with respectable modern motors like the Citroen C1, Peugeot 107 and Toyota Aygo doing well for affordable insurance premiums. Below is the list of cheap cars to insure. You’ll notice that almost all of them are low powered 1 litre engines – if you go for a more powerful car too soon, your premium will accelerate faster than your car, so watch out. All the quotes below are for:
Third Party Fire & Theft Cover
A 17 year-old driver with a full driving license studying a white-collar subject (for example business) with a part-time sales assistant job
Car insurance can be fairly simple to navigate if you have a perfect driving record, have never filed a claim, and are the only driver on your policy. But let’s be honest: the possibility of falling into all 3 of those categories is slim, which may explain why many of us don’t shop around for car insurance as often as we probably should. Even if you’ve accumulated points on your driving record, there are still plenty of money-saving tips that could help you lower your premium. Before you start comparing rates online, check out the following tips to see if you could avoid paying unnecessary fees and qualify for any discounts. 4 ways to save money on car insurance 1. Avoid a lapse in coverage Unlike health insurance, for example, auto insurance can be fairly unforgiving when it comes to nonpayment. Even if your car insurance payment is a day or 2 late, it may be enough time for your insurance company to suspend your policy or charge you late fees.
The good news is many insurance companies now offer smartphone apps that can send you notifications to remind you when a payment is due. And some insurers in certain states may offer a grace period for late payments. If you find yourself in a position where you need to make a late payment, call your insurer first to make sure you’ll still be properly covered for that period of time. 2. Pay your entire premium upfront If reading that your insurance policy could be canceled for being one day late on a payment freaks you out, then you may want to consider paying your entire 6- or 12-month premium in a single transaction. That way, you can avoid the processing fees your insurer likely charges your credit card when you pay each month. 3. Maintain good grades You might’ve thought it’d be good to teach your teenage driver some responsibility by making them purchase their own insurance policy. Sorry parents, but until your young driver is at least 18 years old, they may not be able to purchase one, depending on your state’s laws. But there is a bright side: if your teenager is a high school or college student, their good grades may qualify them for a good student discount. 4. Be careful when switching insurance policies if you have an SR-22 If you’re caught driving without insurance, you’ll probably need your insurer to file an SR-22 form on your behalf. And if you want to switch insurers while you have an SR-22 filed, it’s imperative to purchase a new policy before canceling your existing plan since any lapse in coverage may disrupt your SR-22 status. (Most insurers won’t give you credit for the time after your SR-22 was originally filed, which can cost you even more.)
If you’re looking for cheap car insurance in Massachusetts, comparison shopping is key. The insurance company with the best price will vary depending on your situation. Massachusetts law prevents auto insurers from basing rates on factors including sex, marital status, age (except a discount for safe drivers 65 and older), occupation, income, education, homeownership status or credit information. But companies can consider your driving record, past car insurance claims, where you live and what kind of car you drive. NerdWallet analyzed rates for 10 large auto insurance companies in 10 Bay State ZIP codes to help you find the best deal. Included in this page are the cheapest rates for:
Good drivers
Young drivers
Families with a teen driver
Drivers with a speeding ticket
Drivers with one at-fault accident
Retired drivers
Good drivers in Massachusetts pay an average of $1,500 per year for car insurance from the 10 insurers we surveyed. These rates are based on high liability limits and full coverage for drivers with no tickets or accidents. Having the most expensive insurance company can cost you hundreds each year: We found a $746 gap between the lowest quote, from Hanover, and the highest quote, from Arbella Insurance. Massachusetts requires insurance companies to set driving record-based discounts and surcharges using its Safe Driver Insurance Plan, or come up with their own version. The Safe Driver Insurance Plan provides the following discounts on liability, personal injury protection and collision coverage:
Excellent Driver Discount Plus: 17% off for drivers who have at least six years of experience and no moving violations or at-fault accidents in the previous six years
Excellent Driver Discount: 7% off for drivers with at least five years of experience and no incidents in the previous five years, or one minor moving violation in the previous six years that occurred at least three years before the policy took effect
Young drivers always get dinged on car insurance rates due to their lack of driving experience. They’re also more likely to buy only the minimum level of car insurance required, so for this comparison, we ran quotes for Massachusetts minimums. The rates were far cheaper than those for full coverage policies, which include much higher liability limits. The three lowest quotes for a theoretical 18-year-old driver were all within $6 of one another. Safety Insurance was the next least expensive option, at $523 per year, while the 10 insurers we checked had an average annual premium of $711 overall. The highest quote was $1,349 from Progressive. Young drivers should look into discounts for good grades, driver training and being away at school. It’s also generally cheaper to stay on parents’ policies, if possible. New teen drivers are notoriously expensive to insure. That held true in our analysis, which looked at coverage for two parents and a 17-year-old boy with a 2012 Toyota Camry and 2012 Ford Escape. Annual rates averaged a whopping $6,006. Shopping around for car insurance is crucial for families in this category. It had the greatest price range, with $3,594 separating the lowest quote (Safety) from the highest (Plymouth Rock Assurance). Discounts for good grades and driver training may help ease the pain. The average rate for a Massachusetts driver with a recent ticket for going 11 to 15 mph over the limit was $679 more per year than the average rate for a good driver. Drivers with a speeding ticket paid $1,864 per year on average for insurance, with $879 separating the lowest and highest quote ($2,465 from Plymouth Rock Assurance). So shop around. And remember that the surcharge for a speeding ticket is temporary. Insurance companies using the Massachusetts Safe Driver Insurance Plan will raise your rates if you’ve had any moving violations or accidents within the previous six years. The plan applies surcharges of 15% to liability, personal injury protection and collision coverage for each “point” on your record. Minor moving violations put two points on your record; major ones add five points. You can get a point removed after three years of clean driving using the plan’s “clean in 3” provision. Causing an accident can put a big dent in your wallet. Drivers who’ve caused at least $2,000 in property damage pay an average of $2,485 per year for insurance. Another bit of bad news: You’ll lose any good driver discounts you had. The gap between the cheapest and most expensive insurers in this category was $1,419. Plymouth Rock Assurance came in with the highest quote, $3,251. If your company uses the Massachusetts Safe Driver Insurance Plan, it will add a 15% surcharge to your liability, personal injury protection and collision coverages for each “point” you’ve received on your record within the previous six years. Minor at-fault accidents add three points to your record; major accidents add four. You can get a point removed after three years of clean driving using the plan’s “clean in 3” provision. Massachusetts retirees pay an average annual rate of $1,049. This group had the smallest price gap, with $714 separating the lowest and highest quote (from Arbella Insurance). Still, that means drivers could save 51% by shopping around. Retirees can also score a healthy price break on these rates. Massachusetts requires insurers to provide a 25% discount to experienced drivers age 65 or older. It’s the only state that doesn’t require an accident-prevention course to get a senior-driver discount, according to the Insurance Information Institute, an industry group.
Ways everyone can save
Whether you’re a driver with a clean record or one who’s hit some bumps in the road, you can save by:
Raising the deductible amount on your comprehensive and collision coverage
Eliminating comprehensive and collision altogether on older cars
Choosing a car that’s cheap to insure
Massachusetts requires insurers to provide car insurance discounts for anti-theft devices, passive restraint systems and other safety features. Many companies will also give price breaks for:
Having multiple cars on one policy
Buying both homeowners and auto insurance (called bundling)
Driving a low number of miles each year
Driving a hybrid car
Remaining loyal to an insurance company
Paying premiums in full at the start of the policy period
Making payments electronically
But don’t be distracted by long lists of potential discounts. The company offering the most discounts may not turn out to be the cheapest if its initial rates are high, so it’s essential to shop around.NerdWallet’s car insurance comparison tool can help you compare rates easily.
Methodology
Rates for all profiles except young drivers are based on liability bodily injury limits of $100,000 per person and $300,000 per accident, with $50,000 in property damage. These rates also include personal injury protection, comprehensive, collision, and uninsured/underinsured motorist coverage. Limits for young drivers, age 18, are $20,000 per person and $40,000 per accident, plus $5,000 in property damage, with personal injury protection and uninsured/underinsured motorist coverage, but not comprehensive and collision.
Due to the litigious nature of our society and the rising cost of vehicles, car insurance rates are hefty throughout the nation. The bad news is that insurance isn’t likely to lessen in price any time soon. The good news is that there are things that you can do to minimize increases and/or lessen the burden on your wallet. Let’s take a look at 12 tips you can employ to save your driving dollars. 1. Insure Multiple Cars/Drivers If you obtain a quote from an auto insurance company to insure a single vehicle, you might end up obtaining a higher quote (per vehicle) than if you inquired about insuring several drivers and/or vehicles with that company. This is because insurance companies will offer what amounts to a bulk rate because they want your business, and under some circumstances, they are willing to give you a deal if it means you’ll bring in more of it. To obtain a discount, ask your agent/insurance company to see if you qualify and get a quote. Generally speaking, multiple drivers must live at the same residence and be related by blood or by marriage. Two non-related people may also be able to obtain a discount; however, they usually must jointly own the vehicle. Incidentally, some companies may also provide an auto insurance discount if you maintain other policies with the firm (ex. homeowner’s insurance). Check with your agent/insurance company to see if such discounts are available and applicable. 2. Keep A Clean Record It should go without saying that the more accidents or moving violations an individual has, the more he or she will tend to pay in terms of annual premiums. For those unaware, points are typically assessed to a driver for moving violations. Generally speaking, more points can lead to higher insurance premiums (all else being equal). 3. Take A Defensive Driving Course Sometimes insurance companies will provide a discount for those that complete an approved defensive driving course. Also, sometimes a driver can reduce the number of points he or she has on his or her license by taking a defensive driving, accident prevention or other course. Make sure to directly ask your agent/insurance company about this discount before signing up for a class. After all, it’s important that the effort being expended and the cost of the course will translate into a big enough insurance savings. It’s also important that the driver sign up for an accredited course. 4. Shop Around If your policy has just been renewed and the annual premium has gone up markedly, consider shopping around and obtaining quotes from competing companies. Also, every year or two it probably makes sense to obtain quotes from other companies just in case there is a lower rate out there. However, remember that cheap doesn’t always mean good and going with the lower-priced company isn’t always the wisest decision. That’s because the insurer’s credit worthiness should also be considered. After all, what good is a policy if the company doesn’t have the wherewithal to pay an insurance claim? To run a check on a particular insurer, consider checking out a site that rates the financial strength of insurance companies (such as A.M. Best). Financial strength of your insurance company is importnant but, what your contract covers is also very important so, make sure you understand your insurnace contract. 5. Take Mass Transit When you sign up for insurance, the company will generally issue you a questionnaire. Among the questions it asks might be the number of miles you drive the insured automobile per year. If you use your vehicle to commute three hours to work every day, you will generally pay more in insurance premiums than someone who only drives one mile a day. If possible, try to use mass transit to rack up fewer miles, keeping in mind that you will usually have to decrease your mileage significantly before incurring a discount. Ask your agent/insurance company about the company’s different mileage thresholds so your efforts won’t be wasted. 6. Select Your Vehicle Carefully Buying a huge SUV may sound exciting, but insuring a 5,000-pound, top-of-the-line vehicle can be more expensive than insuring a small (but safe) lower-cost commuting car. Also, older cars are often cheaper to insure than their more modern counterparts. Again, speak with your agent/insurance company to find out the exact rates to insure the different vehicles you’re considering before making a purchase. To learn more about choosing a cost-effective vehicle, see Wheels Of A Future Fortune. 7. Consider Raising Your Deductibles When selecting car insurance, you can typically choose a deductible, or the amount of money you would have to lay out before insurance picks up the tab in the event of an accident, theft or other type of damage to the vehicle. Depending on the policy, deductibles typically range from $250 to $1,000. The catch is that, generally speaking, the lower the deductible, the higher the annual premium. Conversely, the higher the deductible is, the lower the premium. Ask your agent/insurance company how your premium might be affected if you raised your deductible. In some cases, it may make the annual premium better by several percent and put some money back in your pocket; other times, the savings may be minimal. 8. Improve Your Credit Rating A driver’s record is obviously a big factor in determining auto insurance costs. After all, it makes sense that a driver who has been in lots of accidents could cost the insurance company lots of money. However, folks are sometimes surprised to find that insurance companies may also consider credit ratings when determining insurance premiums. Why is a person’s credit rating considered? The theory is that individuals who keep their financial situations in ship-shape condition will tend to be more careful when it comes to driving. Regardless of whether that’s true, be aware that your credit rating can be a factor in figuring insurance premiums and do your utmost to keep your credit rating high. 9. Pay Attention to Where You Live It’s unlikely that you will move to a different location (i.e., state) simply because it has lower car insurance rates. However, when planning a move, the potential change in your car insurance rate is something that you will want to factor into your budget. 10. Drop Unnecessary Coverage Dropping certain types of coverage can be a slippery slope. After all, nobody can predict if or when an accident will occur. However, if an individual is driving an extremely old automobile that’s on its last legs, it may make sense (depending on the cost, the individual’s driving record and other factors) to drop collision coverage. The reason for this is that were the vehicle to be involved in an accident, the insurance company would likely total the car. If the value of the car is only $1,000 and the collision coverage costs $500 per year, it may not make sense to buy it. In any case, before making any such decision, consider speaking with your financial advisor and your agent/insurance company. Remember, every situation is different and the decision is up to you. 11. Install Anti-Theft Devices Individuals have the potential to lower their annual premiums, sometimes by as much as several percent, if they install anti-theft devices. Your agent or insurance company should be able to tell you specifically which devices, when installed, can lower premiums. Car alarms and LoJacks are two types of devices that you might want to inquire about. If your primary motivation for installing an anti-theft device is to lower your insurance premium, make sure to consider whether the cost of adding the device will result in a significant enough savings to be worth the trouble and expense. 12. Question Your Agent It’s important to note that there may be other potential cost savings to be had in addition to the ones described in this article. In fact, that’s why it often makes sense for you to speak directly with your agent or a representative of the insurance company to ask if there are any special discounts that the company offers for individuals such as military personnel or employees of a certain company. The insurance company may also offer a “good student” rate or some other special savings. You never know what sort of discount pricing might be available for your circumstances, but unless you ask, you probably won’t be able to take advantage of it. The Bottom Line The price of auto insurance is likely to continue to rise in the future. However, there are many things you can do to reduce the sting, and hopefully these 12 tips will have you driving in the right direction.
You may find this hard to believe but a lot of people still think that life insurance is a complex, confusing ordeal. In fact, 53% of U.S. households don’t have individual plans. Most think it’s too expensive or that they simply don’t need it. In truth, life insurance is more affordable than a latte-a-day coffee habit, andeveryone should have it. Here are 5 tips for getting the best rate on life insurance.
Buy term coverage
A term-life policy provides protection for a specific number of years, and is usually the best option for most anyone between the ages of 20 and 50. Plus, the younger you are when you buy, the more affordable it is.
Get healthy
Consider this: For $250,000 of coverage for 20 years, a fit 30-year-old man will pay approximately $161 to $192 a year, while a 30-year-old man who’s overweight and smokes could pay $440 to $573. You get the idea.
Be a good driver
Odd as it sounds, it’s true. Life insurance companies will look at your DMV record to learn more about you. The better your record, the better your rates are likely to be.
Get individual coverage
Most often group life insurance policies that you buy through an employer aren’t portable, meaning you can’t take it with you when you go. Get an individual policy to guarantee a good rate and constant coverage.
Update. Update. Update
Life changes, and so should your life insurance policy. If you find a better job, buy a bigger house, or have more kids, re-evaluate your policy to make sure you still have the right amount of coverage. There’s a lot more to know, but these 5 tips will give you a head start on getting the best possible rate on your life insurance. As always, be sure to do your research before you decide. (But we don’t need to tell you that.)
When it comes to auto insurance, you want to be adequately covered if you get in an accident, but you don’t want to pay more than you have to. Unfortunately many people are doing just that, simply because they don’t want to spend time shopping for car insurance. It’s not inherently enjoyable, after all, despite how it looks in commercials featuring disgruntled cavemen and joke-cracking spokespeople. But by doing some comparison shopping, you could save hundreds of dollars a year. When one of our editors used a rate-comparison service, he got basic coverage quotes for his two old cars that ranged from $1,006 to $1,807 — a difference of $801 a year. If you’re paying thousands to your current insurance company because you have a couple tickets, an accident or an out-of-date and unfavorable credit rating, shopping your policy against others might be well worth the effort. Look at it this way: You can convert the money you save into buying something you’ve wanted or needed for a long time.
auto insuranceStep 1: Decide How Much Coverage You Need To find the right auto insurance, start by figuring out the amount of coverage you need. This varies from state to state, so take a moment to find out what coverage is required where you live. You will find a list of each state’s requirements and an explanation of the various types of insurance in “How Much Car Insurance Do You Need?” Also, check out “Little-Known but Important Car Insurance Issues,” which has a glossary of basic insurance terminology. If you’re a first-time driver and need a comprehensive overview of car insurance before you go on, review this guide from the National Association of Insurance Commissioners. Now you’re ready to make a list of the different types of coverage you are considering. Once you know what’s required, you can decide what you need. Some people are quite cautious. They base their lives on worst-case scenarios and insurance companies love that. Insurance companies are in the risk business, and they know a policyholder’s likelihood of being in an accident, as well as how likely it is for a car to be damaged or stolen. The insurance company crunches the information it has collected over decades into actuarial tables that give adjustors a quick look at the probability of just about any occurrence. You don’t have those tools at your disposal, so your decision will depend on your own degree of comfort in assuming a certain level of risk. Experts recommend that if you have a lot of assets, you should get enough liability coverage to protect them. Let’s say you have $50,000 of bodily injury liability coverage but $100,000 in personal assets. If you’re at fault in an accident, attorneys for the other party could go after you for the $50,000 in medical bills that aren’t covered by your policy. General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (usually expressed in insurance shorthand as 50/100/25). Here again, let your financial situation be your guide. If you have no assets that an attorney can seek, don’t buy coverage unnecessarily. Your driving habits might also be a consideration in determining the coverage you need. If your past is filled with crumpled fenders, or if you have a lead foot, or if you make a long commute on a treacherous winding road every day, then you should get more complete coverage. Collision coverage pays for damage that your car experiences in an accident or damage from hitting an inanimate object (a tree, light post or fence, for example). Comprehensive coverage addresses damage that didn’t occur in a collision — such as from fire, theft or flood. It also covers damaged windshields. Keep in mind that you don’t have to buy collision and comprehensive coverage. Let’s say your vehicle is older, you have a good driving record and there is little likelihood that your car would be totaled in an accident, but a high likelihood of it being stolen. Then you could buy comprehensive coverage and skip the collision insurance. Step 2: Review Your Current Insurance Policy Read through your current policy or contact your auto insurance company to get the information you need. Jot down the amount of coverage you have now and how much you are paying for it. Take note of the yearly and monthly cost of your insurance, since many of your quotes will be given both ways. Now you have a figure to beat. Step 3: Check Your Driving Record You should know how many tickets you have had recently. If you can’t remember how long that speeding ticket has been on your record, check with your state’s department of motor vehicles. If a ticket or points you earned are about to disappear, thus improving your driving record, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record. Step 4: Solicit Competitive Quotes Now it’s time to start shopping. Set aside at least an hour for this task. Have at hand your current insurance policy, your driver license number and your vehicle registration. You can begin with online services. If you go to an online site to get a quote for an insurance rate, you can type in your information and begin to build a list of companies for comparative quotes. Keep in mind that not all insurance companies participate in these one-stop-shopping sites, however. If a recommendation from friends and family or other research points to a company that you think might be a winner, you can go directly to its Web site or call its toll-free number to get a quote. Each quote form takes about 15 minutes each to complete. It might be well worth your time, since if the entire shopping process takes you two hours and you save $800, you’re effectively earning $400 an hour. When you use these sites, you might not get instant quotes. Some companies may contact you later by e-mail. Some that are not “direct providers” might put you in touch with a local agent, who will then calculate a quote for you. (A direct provider like Geico sells insurance policies directly to consumers. Other companies, such as State Farm, sell insurance through local agents.) You can learn more about the various kinds of agents here. Step 5: Gather Quotes and Company Information While you’re researching companies, take careful notes so you can easily make price and coverage comparisons. Keep a list of:
Annual and monthly rates for the different types of coverage. Make sure to keep the coverage limits the same so you can make apples-to-apples comparisons for cost and coverage.
The insurance company’s 800 telephone number, so you can get answers to questions you couldn’t find online.
The insurance company’s payment policy. When is the payment due? What kinds of payment plans are available? What happens if you’re late in making a payment?
In later steps, you’ll add some more information to this list. Step 6: Work the Phones Once you have gathered information online, it’s time to work the phones. Contact those companies from which you haven’t been able to get an online quote. Doing the research by phone can actually be easier and faster than on the Internet, provided you have your driver license and vehicle registration close at hand. When you get a quote over the phone, be sure to confirm the price by asking the representative to e-mail the quote to you. Step 7: Look for Discounts When you’re making these calls and shopping online, make sure you explore all your options relating to discounts. Insurance companies give discounts for such things as a good driving record, your car’s safety or security equipment and certain occupations or professional affiliations. Some companies are now offering lower rates if you enroll in “pay as you drive” plans. Some will give substantial discounts for young drivers in the family who have high grade-point averages. (You can use this as an incentive to your teen drivers and offer to share the savings with them.) Also consider using the same insurance company for home and auto policies. That will usually get you a better price. For more guidance on discounts, check out “How to Save Money on Car Insurance” and “Top 10 Ways To Lower Your Car Insurance Bill.” Step 8: Assess the Insurance Company’s Track Record You now have most of the price and coverage information that you need to make a decision. You can see which company’s coverage is least expensive, but it’s important to keep in mind that cheap isn’t the only basis for choosing an insurer. How do you know which company is financially sound? How do you find out if an insurance company is going to treat you right — particularly in the event of a claim? Here are some places to check to develop a clearer picture of an insurance company’s track record for fairness, financial stability and customer service. 1. Use the National Association of Insurance Commissioners’ Consumer Information Source to access information about insurance companies, including closed insurance complaints, licensing information and key financial data. You also can visit your state’s department of insurance to check consumer complaint ratios and basic rate comparison surveys. 2. Consider contacting an independent insurance agent for additional information about a company. 3. Check out the financial strength ratings for an insurance company by referring to the ratings fromA.M. Best and Standard & Poor’s (registration may be required). 4. Review consumer satisfaction surveys from J.D. Power and Consumer Reports (subscription required). 5. Ask friends and family about their insurers and whether they’re satisfied with them. In particular, ask them how their insurance companies treated them if they had a claim. Did they get fair, straightforward service? Or was it a hassle to get the matter resolved? Step 9: Review the Policy Before You Sign When you’re done your research and zeroed in on a company, read over the main points of the policy. In addition to verifying that it contains the coverage you’ve requested and priced, it’s a good idea to find out if the policy states that “new factory,” “like kind and quality” or “aftermarket parts” may be used for body shop repairs, says Dennis Howard, director of the Insurance Consumer Advocate Network. If the policy has such a requirement, think hard about whether this is the company for you, particularly if you own a relatively new car that you plan to keep for a while. In this case, it’s best to know at the outset that the insurer will pay for original manufacturer parts, rather than try to fight later, when you have a claim. Step 10: Cancel Your Old Policy; Carry Your Proof After you have secured the auto insurance policy you want, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or the glove compartment of your car. Finally, here’s a quick checklist to keep you on track:
Determine your state’s minimum insurance requirements.
Consider your own financial situation in relation to the required insurance and consider whether you need to increase your limits to protect your assets.
Review the status of your driving record — do you have any outstanding tickets or points on your driver license?
Check your current coverage to find out how much you are paying.
Get competing quotes from Internet insurance Web sites and individual companies of interest to you.
Make follow-up phone calls to insurance companies to get additional information about coverage.
Inquire about discounts.
Evaluate the reliability of the insurance companies you’re considering by visiting your state’s insurance department Web site, reviewing consumer surveys and talking to family and friends.
Review the policy before finalizing it. Remember to cancel your old policy.
