Auto insurance advertising
Auto insurance is a highly competitive business and insurance companies use the following techniques to let you know what kind of rates they offer.
Direct Mail Marketing: Many well-known auto insurance companies use e-mail or snail mail to advertise their rates. Read these advertisements carefully and do some research via the Web to double-check the company's reputation and rates.
Telemarketers: Offers from insurance companies also come over the phone, but the rules that apply to direct mail marketing also apply to telemarketing calls. It's also a good idea to ask for a phone number where you can call the company back to discuss coverage and rates.
Television Ads: Cartoon-style superheroes, CGI lizards and cavemen are among the spokespeople hawking low insurance rates on television. While these ads get attention, they don't say much about service, and it's worthwhile to remember that the cost to produce those ads and buy the advertising comes out of customer premiums.
Shop around using the Web
Most auto insurance companies have Web sites where you can enter the make and model of your car plus the level of coverage you want and receive a rate quote in just a few minutes. Some sites will even compare their rates with other insurance providers.
It's a good idea to spend some time researching rates on several different auto insurance Web sites. Don't take comparison rates at face value; go out and double-check those rates. Be aware, too, that published auto insurance rates may not include discounts that you're eligible for as a member of AAA, AARP or a professional or trade organization.
Factors that Affect the Price of Auto Insurance
Age: No matter how good a driver you are, most auto insurance companies assume that drivers between the ages of 18 and 25 are among the most dangerous on the road, and their insurance premiums reflect this attitude.
On the flipside, drivers between the ages of 50 and 65 may qualify for a discounted auto insurance rate, so it pays to check with your auto insurance carrier and their competitors to see who offers an older driver discount. Drivers over the age of 65 are placed in a high-risk category by many auto insurance companies. Having a long-term relationship with your insurer and a clean driving record may keep these age-related increases at bay.
Zip Code: Auto insurance rates are heavily influenced by location. If you move into an area that has a higher-than-normal rate of auto accidents or theft, chances are good that your auto insurance rates will increase.
If your auto insurance rates do go up after a move, check with your insurance agent to see if you can negotiate a lower rate based on your history with their company. In high-theft areas, investing in an alarm system will pay off over time with lower premiums.
Marriage and Divorce: While selecting the cake and the band for your wedding, the Insurance USA Web site recommends talking to your auto insurance agent about multivehicle auto insurance discounts. Men under the age of 25 can also get a rate reduction based on the assumption that a married man is not going to drive as aggressively as a single one.
The same is true in the event that you get divorced or your spouse passes away. Auto insurance premiums can go up if you move from your current address due to one of these life-changing events.
Credit Score: Auto insurance carriers do look at your credit score to help determine what premium you will pay. Insurance.com recommends that you take a look at your credit report and, if possible, try to clean it up as much as possible. Late payments, too much outstanding revolving credit and recent credit card applications can lower your credit score.
How much insurance do I need?
Most states require that you carry proof of insurance in your car, which has to be shown to law enforcement officials upon request. You need auto insurance, but how much coverage is enough?
The Hartford Insurance Group recommends comprehensive insurance for vehicles that are 10 years old or less. Each state also has minimum coverage requirements for liability coverage and may require that you carry "Uninsured Motorist" coverage as well, which protects you if you are involved in an accident with an uninsured or underinsured motorist.
If you're still paying for your car, the lender who holds the note will usually require specific levels of fire, theft and collision coverage to ensure that the loan is repaid even if the vehicle is stolen or destroyed. Once you pay off the loan, it's a good idea to sit down with your auto insurance provider and negotiate a new policy without this coverage to lower your premium.
Ways to save money on auto insurance
Bundling Policies: Most insurance companies offer discounts if you have both your auto insurance and your homeowner's insurance policies with them.
Corporate Discounts: In addition to discounts offered by AAA and affinity groups, you may qualify for insurance savings through your employer. Ask your manager or HR department if these discounts are available.
Drive Responsibly. Moving violations, accidents and drunk-driving arrests have a lasting impact on your auto insurance rates. In some states, failing to wear a seatbelt can lead to an insurance surcharge. One of the simplest ways to keep auto insurance rates down is to be a good driver.
Raise Your Deductible. You'll pay a lower premium for auto insurance with a $2,000 deductible than insurance with a $200 deductible. Put the amount of your deductible in an interest-bearing bank account in case you need it. You'll save on your premiums, and if you do wind up needing to spend your deductible, you'll still have the interest in the bank.
Safe Driving Classes: Safe driving courses aren't just for drivers who have lost their licenses. Many auto insurance companies give discounts after you complete a refresher defensive driving course. This is particularly beneficial for drivers under 25 and over 65 years of age.
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