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Keeping Car Insurance Premiums Low

Although auto insurance rates are based on a number of factors such as your age, marital status and driving record, you can still lower your insurance costs by doing some careful shopping.
According to the Western Insurance Information Service (WIIS), consumers can save hundreds of dollars a year if they follow these suggestions:


Some insurers will offer discounts that can reduce your insurance premiums from 5% to 40%. Always ask your insurer about the types of discounts their company offers because you may be eligible for a discount that would not otherwise automatically be applied to your premium. Keep in mind that these discounts vary from company to company. Here is a list of some common discounts:

  • Low mileage/Restricted mileage

  • Passive restraints (cars equipped with automatic seat belts or air bags)
  • Anti-lock brakes
  • Good driver discounts (no accidents or moving violations in the past three years. A 20% discount is mandatory in California)
  • Multi-car discounts (for insuring more than one car with the same company)
  • Loyalty discounts (insured with same company for a specified number of years)
  • Defensive training/driver training courses
  • Anti-theft devices (these include ignition and fuel cut-off systems, alarms, hood-and-wheel locking devices, and window identification systems)
  • Nonsmoker discounts
  • Drivers over age 50
  •  Multiple policy discounts (Auto and homeowners coverage with the same company)
  • Car-pooler
  • College students away from home without a car


By raising the deductible on collision and comprehensive coverage, you can substantially lower your insurance premiums.


Before you buy a new or used car, you should check how much your insurance premiums may cost. Cars that have high theft rates, high frequency of claims or are expensive to repair will have high insurance rates. However, buying "low profile" cars such as mid-sized station wagons or four-door sedans and cars with safety features can save you a considerable amount of money.
According to the Highway Data Loss Institute, some examples of cars with low theft claims are the Mercury Sable, Chevy Cavalier, and Mazda MPV Van. Cars with high theft rates include the Mercedes, Chevrolet and Ford convertibles, and the Volkswagen Cabriolet or Golf/GTI.


There are six basic types of coverage: 1) Bodily Injury Liability Insurance, 2) Medical Payments Insurance, 3) Uninsured/Underinsured Motorist Protection, 4) Property Damage Liability, 5)Comprehensive Physical Damage Insurance and 6) Collision Insurance.
You should review each type of coverage carefully as each one applies to different types of losses. You can easily waste money by duplicating coverage's. For example, if you already have good medical and disability insurance, you may not want to buy medical payments insurance. Also, if you have collision and comprehensive insurance, you don't need to buy the type of uninsured motorist protection that pays for damages to your vehicle.
You can also save money by dropping collision/and or comprehensive coverage's on older cars worth less than $1,000. If you make a claim, you would not substantially exceed annual cost and deductible amounts.


Since auto insurance rates can vary by hundreds of dollars, you should do some careful shopping. Keep in mind that when you compare prices, premiums are based upon the same types of coverage's and information being quoted.
While price is an important factor, you should also consider the quality of service the insurer will provide. Check the insurance company's claims paying history and financial strength to ensure that the company is reliable. You can call the Department of Insurance in your state to check if a company is licensed to sell insurance there.

Source: Western Insurance Information Services