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Auto Insurance Buying Tips!Insurance is a long, complicated equation that should be solved carefully. Our buying tips give you all the advice you need as to which kinds of coverage to buy, how much of each is reasonable, and which ones are a waste. More factors affect insurance than you may realize; prudent changes to your lifestyle, driving style, vehicle choice, vehicle options (and even your study habits!) can reduce your premiums. There are many factors that affect auto insurance premiums, only some of which you can control. Starting with the ones you can’t, know that demographics count. Males pay more than females and the middle-aged pay less than the young or the old (ages 25 and 56 seem to be a significant landmarks). If you want to decrease your rates, it certainly helps to move to a better neighborhood (less theft and/or traffic congestion) or get married (only responsible people tie the knot, right?), but those endeavors come with their own costs.
Choosing the type of vehicle is the easy part. Depending on how much digging you want to do, it might also be worth researching specific cars within a given class. One source found a Dodge Neon costing $478 more a year than a Saturn SL2 (both are compact sedans that cost a mere $15,000 when new) at the same provider, just to name an extreme example.
Think hard about which incidents to report. Even if you do crash, it might not be financially worthwhile to make a claim. First, there’s that deductible worth hundreds of dollars standing in your way of full reimbursement. Just as important is the reason just discussed: spending three years at a higher premium rate can wipe out whatever’s left over. Make sure you have a big enough claim (say, at least several hundred) before you file.
Cover your kids under your policy. They’ll save a bundle, as will you, thanks to the standard practice of giving discounts for insuring multiple cars on one policy. Try to not make those risk-prone minors the stated primary driver of any car – especially an expensive one.
Shop around for the best carrier. Many consumers stick with the same insurance company for life (probably out of laziness), but they could be missing out on hundreds per year.
Do your homework. Literally. This can give a much-needed discount for drivers who are stuck with the lowest incomes and the highest rates: students. Maintaining a 3.0 GPA is the common requirement, and maintaining is a must, since applicants will be prompted to send in annual proof of their good study habits. Take a professional drivers class through your local DMV, a certified driver training or defensive driving class can lower your rates in some cases and depending upon your insurance carrier!
Auto Insurance Coverage Types!Coverage types are the core of any insurance policy. If you don’t know what you’re buying, your insurance company might not be there for you when you need them most. Just as likely, you’re buying a lot more coverage than you need. Learn the various types of coverage and determine your ideal plan.Liability coverage is the primary – and usually mandatory – part of the auto insurance equation. Liability means what the word implies: it saves your bank balance when you’re liable for destroying someone else’s car or body parts. Liability is usually quoted as a three-part number like “100/300/50.” Respectively, that means for any one incident, you’re covered for $100,000 in bodily injury per person, $300,000 in bodily injury total, and $50,000 in property damage. 100/300/50 happens to be the minimum coverage recommended by the industry. And while we all know how much to trust them, the numbers aren’t such a bad idea for a typical person with a healthy supply of assets to lose. Without adequate coverage, one at-fault collision with a five-passenger BMW could mean kissing your beachfront mansion goodbye. Right now, 10/20/5 is the lowest state-mandated number while 50/100/25 marks the highest. South Carolina, Virginia, Tennessee, New Hampshire, and Wisconsin are the five states that do not require liability.
Let’s start with Collision, which is not to be confused with liability. Liability pays the bills for damage you cause to the other party; collision covers damage done to your own car. If someone else totals it, his liability pays for repairs (assuming he doesn’t hit and run), so if you can follow the aforementioned tip of not crashing, you generally shouldn’t need collision. In simplified terms, buying collision insurance can be thought of paying someone to save you from yourself. The safer you drive, the less necessary it becomes. Comprehensive coverage protects against any unforeseen disaster that doesn’t relate to crashing, i.e. theft, vandalism, fire, ice, earthquakes, falling trees, volcanic eruptions, etc. Sometimes it can be fuzzy; hitting a deer theoretically falls under comprehensive. But if you live in decent climates, the key word there is probably “vandalism.” Those in good-climate, low-theft areas may not need this at all.
The bottom line is that together, collision and comprehensive amount to a fat portion of your total insurance. Dropping them can cut your bill to less than half. In the case of this author, the total plunged from over $1,000 a year to $405. If you can’t justify dropping them entirely, then at least keep your deductibles (the portion you pay in any claim) high. Diminishing returns comes into play, however: jumping from a $250 deductible to $500 saves a lot, jumping from $500 to $1,000 saves less, etc. Keep it at $500 at least. Uninsured/Underinsured motorist coverage, required by most states, is always a good idea knowing that 17% of drivers out there don’t have any insurance, and a lot of the rest probably skimp by on the sometimes-inadequate state minimums. This usually varies in tandem with the body injury part of liability. Don’t sweat it too much, as the premium is a mere fraction of liability. Personal Injury Protection (PIP) or Medical Payments (MedPay) provides reimbursement for medical bills of you and your passengers regardless of who’s at fault, and for resulting lost wages. This is an option – one that those with good health insurance plans might not want to exercise. Rental reimbursement simply pays for the cost of renting a car. Even if it costs $30 a year, why bother? $30 basically buys a one-day car rental, so it’s hardly worth it unless you get stranded a lot. (In which case, you might want to switch cars.) If you own a second car, this is completely unnecessary. The same reasoning applies to towing insurance and the like. Feel Free to rent from Thrifty Rent-A-Car! Click on this link for details!Lowest Price Guarantee. See Thrifty.com for full details. An option for lease car drivers is GAP insurance, which covers the difference between what the car is actually worth and what you owe. This might be an attractive proposition for a car that with heavy depreciation, which is a symptom suffered by young cars in general. A $20,000 car might drop to $12,000 in market value after a year. If you total the car at that point, $12,000 is all you’ll get from your insurance company, yet you’re still obligated to the $16,000 in payments that still remains. Obviously, $4,000 is one gap you’ll want closed. **Need A FREE Quote?Compare & Save on Auto Insurance! Auto Insurance Scams
Although most insurance scams are directed from the insured at the insurer and not the insuree, remember that everyone, to an extent, is in the same boat here. Insurance is one of those deals that philosophers might label “tragedy of the commons”: everyone has an incentive to take advantage of the system, but the burden gets passed around to all. In general, an insurance company in financial trouble draws upon its customers to bail it out. And on a more specific level, for example, rising theft or accident rates in your neighborhood make you look like a higher-risk. Now that you have a personal incentive to keep a watchful eye, look out for some of the more common scams. First, it’s pretty easy to take advantage of those simplistic, one-size-fits-all laws we have. Everyone knows that any rear-end collision is pretty much always the fault of the rear car, right? It’s not hard for an opportunist to scan the roads for a Mercedes to fill his rear view mirrors, slam on the brakes, and file a claim. The “victim” may also go off after the accident to inflict additional damage, and he may later claim more passengers were injured than were even in his car at the time. It can get more complicated than that, of course. Getting money to fix one’s car won’t net much, but collecting to relieve physical pain can drive up the tab in no time. It can take some crooked body shop owners, doctors, and lawyers to pull these off successfully, but don’t think there aren’t any out there. Also beware of fake helpers who seemingly show up on the scene at the right moment. While he may seem to be a savior, he’s probably in on the scam and will likely recommend bogus body shops or physicians who will overestimate damages. Stay skeptical around overly generous motorists. One example might be a merging situation in which the driver signals his intent to willingly yield to give you the right of way. Then he speeds up, a sideswipe occurs, and when the police arrive, he denies ever giving you any such signal. Possibly easiest of all are “paper accidents”, where the cost of accidents are simply exaggerated on paper (by a shady body shop) or fabricated altogether. Perpetrators typically keep claims under $1,000 so insurers would be less apt to investigate. Which is what makes it so easy. If cautious, preventative driving doesn’t work, then in any incident, the smart move is to document the responses, driver’s licenses, and plate numbers of everyone and everything, take a photo or two if you have a camera handy, and call the cops right away. If the other guy wants to lie, make him lie right there, unrehearsed, for the official record, to the face of the law. If anything comes up, it will be easier to fight it then.
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So let’s stick with what you can control. As far as choosing a car, dullness pays. The lowest rates go to the most innocuous vehicle types – minivans and low/mid-priced sedans – because of what they imply about their drivers: mild personalities make for mild risks. Another force at work is how much damage one vehicle can do to another, where battering ram-like trucks and SUVs do not fare well. These factors mostly impact liability, which, in 45 states, is the mandatory piece in the insurance equation. On the flip side, ultra-cheap lightweights like the Kia, Suzuki, don’t have stellar rates either, for a related reason: they do a mediocre job of protecting you, the driver in a crash or impact!
Another major point is the cost of the car, which should be self-explanatory. This impacts collision coverage, which covers repairs to your car. It also lowers another type of coverage called comprehensive, which basically covers your car in any loss that doesn’t involve crashing. Another good way to lower comprehensive is to pick a car with a low theft rate. Put another way, drive a car that no one else wants. Case in point: a recent study found the Ford Taurus wagon and Saturn LS at the bottom of the theft list.
Differences within a class are largely due to the cost to repair specific cars, which has a lot to do with how they were designed. Some models show more variation between different providers than others, though it could be awfully time-consuming to check every single car across every single provider.Don’t crash. As if you needed another reason not to, getting involved in a crash (even ones that aren’t officially your fault, in some cases) is the most sure-fire way to inflate your premiums. The label of “high-risk driver” stains your record, typically for about three years.
Don’t get tickets. Insurance companies look for any excuse to raise those premiums, of which tickets are the most common. 
Get a car packed with safety features like air bags, antilock brakes, traction control, and stability control. Front air bags have been the norm since the ‘90s, but side and curtain air bags have not, and they have been found to help more and more with each passing year. Some companies began retracting antilock brake discounts after research failed to illustrate any safety benefits through cold, hard statistics. But some still do (some states make them), and antilock brakes are worthwhile to have in any case. Stability control, meanwhile, just got a big publicity boost from a September 2004 study finding that it reduces fatal accidents by 30% in cars and 67% in SUVs.
Once you’ve found an ideal match, however, try to stick around, because loyalty discounts eventually kick in. Pay your bills. It might not seem fair, but at many companies, insurance premiums vary with credit scores. The thinking is that someone irresponsible with money would be irresponsible behind the wheel. This has aroused all sorts of controversy and backlash. Various accusations have been fired – of it being unfair, illogical, anti-consumer, or segregative – but until this is resolved, try to master your MasterCard.
The other key insurance types are collision and comprehensive. While they have nothing to do with each other, they’re often referred to collectively because they share two significant traits: they’re expensive and they’re usually optional.
The thing about both collision and comprehensive insurance is that when your car’s value drops below a certain amount, neither coverage is worth owning. Consumer Reports recommends that when the cost of either premium amounts to 10% of your car’s value, drop it. 10% is as good a number as any, but if you want to come up with your own magic mark, just ask yourself this unanswerable question: what is the likelihood that my car will get hit/stolen/melted/etc.?Collision and comprehensive are optional except in the case of new leased or financed cars you don’t own. Understandably, no lessor wants your problems to become his problems. You can get an idea of the maximum you’d ever get from your insurance company by turning to the big blue book to determine actual cash value. Actual cash value isn’t the same as the replacement cost, which for some cars (ones with rare or expensive parts), might be a lot more.
