What steps can I take to reduce my rates?

Insurers often discount their rates for good drivers and those who take of safety and security precautions. Depending on the insurer, you can often lower your rates from 5 to 35 percent.

Sometimes the investment you make in your vehicle is worth the discount, and sometimes it's simply worth some peace of mind. For example, the purchase of anti-lock brakes merits a discount from nearly every insurer, but the discount probably will not pay for the brakes during the normal life of your vehicle.

Insurers generally offer discounts for:

Safety Features—Anti-lock brakes, air bags and passive restraint systems (i.e., automatic seat belts).

Defensive Driving—Clean violation record, driver's education courses for teenagers and defensive driving or accident prevention courses for adults (insurance discounts for the latter are required in some states).

Security Systems—Alarms, electronic locks and disabling devices.

Changing Driving Habits—Commuting by public transit, using a company vehicle for work-related travel and car-pooling.

Formal Agreements Not to Drink and Drive—The availability of a discount for signing such an agreement varies among insurers and states.

Buying Home Owners and Auto Policies from the Same Company—If you own a home and an automobile and you are insured by two different companies, check into the cost of carrying both policies by one insurer. Your Trusted Choice^SM agent can give you guidance as to which insurers offer discounts.

You can also lower your insurance rates by requesting higher deductibles (the amount of money you pay before you make a claim). Increasing your deductibles on collision and comprehensive coverage from $100 to $250, or even $500, will bring your rates down. Moreover, you may not need collision and comprehensive coverage if you drive an older car. Ask your Trusted Choice^SM agent which discounts are available to you.

How does adding drivers to my policy affect my rates?

The more people you allow to drive your vehicle on a regular basis, the greater the chances of your vehicle being in an accident. Teenagers are especially expensive to insure because they are the least experienced drivers.

A driver's education course can help ease the burden of insurance costs since it teaches your teenager defensive driving techniques. If your child's high school does not offer driver's education, try to find one offered by another school or a private firm in the area. After all, the cost of driver's education could be cheaper than the extra cost of your insurance. (Many insurers offer "good student" discounts as well.)

An adult's driving experience can also affect your rates significantly. Don't assume that every adult you know has been driving since age 16 or is a competent driver with a clean record. Again, taking a defensive driving course is a good way for adults to prove they are responsible drivers, thus lowering their risk and their insurance rates. (This is a great solution for new couples who are jointly insured but unmatched in their driving skills or experience.)

Who's watching the insurance companies?

With few exceptions, your insurance company does not set its own rates (unless you live in Illinois). It requests the right to charge appropriate rates from your state's insurance department, which responds with legal approval and authorization, provided the requested rates are fair.

Every state has some sort of department, administration or agency that regulates and monitors every insurer operating within the state's borders. In addition to approving rates, your state's insurance department is involved in all insurance matters on behalf of private citizens and businesses. It also issues operating licenses to insurance companies and agents, based on their ability to meet the state's requirements for conduct and knowledge about insurance issues.

Your insurance company works closely with your state's insurance department to make sure you are getting the best and fairest possible service within the state's guidelines. Contact your state's insurance department if you wish to know more about how it serves your interests.

Do I always need to buy insurance when I rent a car? Am I not covered by my own policy?

If you have fully insured your own vehicle, including collision and comprehensive coverage, and rent a vehicle for pleasure only (while on vacation, for example), you do not need to buy extra insurance from the rental company. In fact, in most states your basic rental fee by law will include liability coverage for damage or injury to others. But different rules apply when you rent a car for business purposes, so check with your Trusted Choice^SM agent for details.

If you do not have your own insurance, be aware that many car rental liability policies cover you only at the state's required minimum. Also, you should buy the collision and comprehensive coverage offered by the rental company for your own protection. Plus, do not buy a collision damage waiver (CDW) from the rental company assuming it is insurance. A CDW simply releases you from financial responsibility if you damage the vehicle you are renting, provided you comply with the terms of the rental contract. But those terms can vary considerably, and CDWs are not state-regulated, which means they are technically not insurance.

It's always a good idea to review your policy before renting a vehicle and, if necessary, contact your Trusted Choice^SM agent for clarification.

Part 2

Part 4

Date Posted to Site:   Dec. 2003

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