Get the Most for Your Auto Insurance Dollar


The I.I.I. Offers Tips for Saving Money on Auto Insurance

Contact: Press Offices
New York: 212-346-5500;
Washington, D.C.: 202-833-1580

New York, March 26, 2008 - High oil prices and a shaky economy have consumers searching for ways to cut costs and save money. Fortunately, there are a number of proven ways to save on auto insurance, according to the Insurance Information Institute (I.I.I.)

"Auto insurance is a highly competitive business which means that consumers have a number of auto insurance companies to choose from," said Jeanne Salvatore, senior vice president and consumer spokesperson for the I.I.I.

The National Consumers League suggests that consumers compare policies not only on price, but also on coverage, customer service and company reputation. "Like any other service, consumers will be surprised to find they can save a substantial amount if they compare price, and work with their agent or company representative to reduce costs. Don't be afraid to ask your insurance representative what he or she can do to shave dollars off of your premium," said Sally Greenberg, executive director of the National Consumers League.

The I.I.I. suggests nine ways to save money on auto insurance:

1. Shop around

Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers

Get quotes from different types of companies. Some sell through their own agents; these agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Other companies sell directly to consumers over the phone or via the Internet.

But don't shop by price alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. You can also contact your state insurance department to find out whether they make company consumer complaint ratios available.

2. Ask for a higher deductible

Your deductible represents the amount of money you pay before your insurance policy kicks in when you have a claim. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $250 to $500 could reduce your collision and comprehensive coverage cost by 15 percent to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. Keep in mind that claims occur on average only once every 11 or 12 years.

3. Before you buy a car, compare insurance costs

If you are in the market for a new car, get an insurance quote before you buy. Your premium is based in part on the vehicle's sticker price, the cost to repair it, its overall safety record and the likelihood of theft so some cars and models will cost less to insure than others. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states even require insurers to give discounts for cars equipped with air bags or anti-lock brakes.

Cars that are favorite targets for thieves often cost more to insure. Information to help you decide what car to buy is available from the Insurance Institute for Highway Safety.

4. Reduce coverage on older cars

Consider dropping collision and/or comprehensive coverage on older cars. It may not be cost-effective to continue insuring cars worth less than 10 times the amount you would pay for coverage. As a general rule, it does not make sense to pay comprehensive or collision on a car worth less than $1,000 as any claim payment you receive would not substantially exceed your premiums minus the deductible. Auto dealers and banks can tell you the worth of a car, or you can look it up online at Kelley Blue Book.

5. Buy your homeowners and auto coverage from the same insurer

Many insurers will give you a discount if you buy two or more types of insurance from them. Also you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce premiums for long-time customers. But shop around-you might save more money by buying from different insurance companies despite the multi-policy discount.

6. Maintain good credit

Your credit rating may affect what you pay for insurance (along with the cost and availability to finance the purchase of the car), so keep a close eye on it. Using credit ratings can make insurance rates more accurate, fair and objective. While the use of insurance scoring varies from state to state and company to company, it is a fact that drivers with long, stable credit records have fewer accidents than drivers who don't. There are various Internet services that allow you to check your credit rating and provide tips on how to improve your score.

7. Seek out safe driver discounts

Companies offer discounts to policy holders who have not had any accidents or moving violations for a number of years. You may also qualify for a premium cut if you have recently taken a defensive driving course.

8. Take advantage of low mileage discounts

Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

9. Inquire about other discounts such as:

  • Group insurance
  • Good student discounts for young people who take drivers education and/or get good grades
  • Defensive driving

For information about what is covered by a standard auto insurance policy go to the Auto section of the I.I.I. Web site.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.

Back to top