Posted on: Thursday, August 7, 2003

Shop around for best insurance rates

By Eileen Alt Powell
Associated Press

NEW YORK — With the cost of auto and homeowners insurance rising rapidly, it's a good idea to review policies to see if there are ways to reduce premiums.

Many insurance companies will give consumers a discount if they buy both types of coverage.

The average consumer will spend $855 on auto insurance this year, up about 18 percent since 2001, according to the Insurance Information Institute in New York. And consumers are expected to spend about $603 for homeowners insurance, up more than 17 percent in the last two years, the institute estimates.

Reasons for the premium increases range from higher medical costs for accident victims and more-costly car repairs on the auto side, to an unusual number of storms and the emergence of expensive mold claims on the homeowners side.

Still, families can take steps to lower their costs, experts say. The most important is to comparison-shop, because premiums vary widely among insurance companies.

One place to begin looking is www.naic.org, maintained by the National Association of Insurance Commissioners, which represents state insurance officials. State insurance departments also keep lists of approved companies, and some provide lists of standard rates.

When it comes to auto insurance, "you get the biggest bang from raising your deductible" — the amount a consumer has to pay on a claim before insurance coverage kicks in, said Carolyn Gorman, a vice president at the Insurance Information Institute's office in Washington, D.C.

Gorman said increasing the deductible on an auto policy from $200 to $500 will reduce the cost of collision and comprehensive coverage by 15 percent to 30 percent.

Some auto insurance companies give discounts, according to the institute, which offers tips at www.insurance.info. Ask about them if you're 50 or older, haven't had an accident or moving violation in three years, if you or your teenage drivers have taken a defensive driving course, or if you've installed car anti-theft devices.

Sometimes families can get a better auto insurance rate if they apply through a professional organization such as AARP.

When it comes to homeowners insurance, you can save by raising the deductible, said Alan Snyder, chief executive of Answer Financial Inc. in Los Angeles.

"Most people, if they have a small claim, don't file it," Snyder said. "They're right. It will make the premium go up. Then it's silly to have a very low deductible."

The company's Web site at www.answerfinancial.com has calculators that let shoppers plug in different deductibles and add or subtract auto insurance to see the impact on premiums.

As with auto insurance, discounts can be available for installation of a home security system. Some companies give discounts to long-term policyholders who have not filed many claims, while others give price breaks to retirees.

Home buyers should be aware that insurance companies are keeping a closer watch on the number of claims filed on a property — and raising premiums accordingly.

For $12.95, consumers can check the Comprehensive Loss Underwriting Exchange score for a primary residence at www.choicetrust.com.