Shop around for auto policies

By Albert B. Crenshaw
The Washington Post

WASHINGTON — Conventional wisdom holds that smart consumers shop around to save money. And conventional wisdom is right — big time — when it comes to car insurance.

Washington Consumers' Checkbook, a magazine that surveys goods and services in the District of Columbia area, comparison-shopped at more than a dozen insurance carriers, presenting them with four combinations of cars and drivers, and found large differences in prices quoted for drivers in the same situation.

Robert Krughoff, president of the Center for the Study of Services, which publishes Checkbook, said the differences are much greater than in the last survey in the early 1990s, so savings that were a few hundred dollars then can be $1,000 to $2,000 now. Also, he said, "we find companies that are very large players in the market, with hundreds of thousands of policyholders, have very high rates."

The magazine looked at prices for the following people, all with clean driving records and excellent credit:

• A married couple, ages 34 and 35, homeowners, driving a 2001 Ford Taurus (15,000 miles annually) and a 1998 Toyota Corolla (12,000 miles).
• Married couple, ages 61 and 62, homeowners, with a 19-year-old daughter in college but living at home, same cars as above (12,000 and 6,000 miles).
• Single woman, 30, driving a 2002 Toyota Camry (10,000 miles).
• Retiree, 65, driving a 2000 Buick Regal (pleasure only).

It sought prices for these drivers in the Washington and suburban Montgomery and Prince George's counties, Md., and Arlington and Fairfax counties, Va. Rates were for a fairly standard policy, though there were some variations between the jurisdictions because of differing regulation.

Differences of $1,000 or more were common for the couples in D.C. and Maryland, and more than $500 in Virginia. The two single drivers generally had lower rates, but not always. The lowest rate for the retiree in Arlington was $480 from Geico; highest, $1,008 from Progressive.

Insurers say many factors go into their prices, including their experience with claims in a jurisdiction; the regulatory and litigation climate; and business goals, such as a desire to build market share or to trim business in an area to reduce exposure to big storms.

J. Robert Hunter, director of insurance at the Consumer Federation of America, said most drivers don't shop — and insurers know it.