How to save money on car insurance
By Sandra Block
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As the price of gas accelerates past $4 a gallon, perhaps it's time to think about another painful cost of driving: auto insurance.
After falling or remaining flat through 2007, average auto insurance premiums rose during the first quarter of this year, a new survey by Insur ance.com, a Web site that lets consumers compare insurance quotes, found.
Rates increased by an average of 1.05 percent in the quarter and are likely to continue rising through the rest of the year, said Sam Belden, consumer director for Insurance .com.
Robert Hartwig, president of the Insurance Information Institute, concurs that auto insurance rates rose during the first quarter but said the increase added only $8 to $9 to the average consumer's annual bill.
"The cost of auto insurance is, on average, increasing, but at a very modest pace and well below the pace of overall inflation," he said.
Still, whether your rates are rising or remaining flat, auto insurance is a big expense. In 2005, the latest year for which figures are available, the average annual cost of auto insurance was $829, according to the insurance institute.
Fortunately, there are steps you can take to lower your insurance rates. The first, and most important, is to drive as though your mother were sitting in the passenger seat. Even one speeding ticket could raise your insurance premium. Conversely, many insurers will lower your rate if you haven't had an accident or been ticketed in the past three to five years.
Other tips:
If the price of gas has led you to join a carpool or to take the bus to work, talk with your insurer, because you might be eligible for a low-mileage discount. You'll probably need to provide documents to support the change in your driving habits.
And if you're in the market for a new insurance policy, a low-mileage discount "is definitely something to ask about when you're shopping around," said Bob Passmore of the Property Casualty Insurers Association of America, an industry trade group. "If you've got a car you only drive back and forth to church on Sunday, you want to make sure they know that."
"With insurance costs already being substantial and becoming more expensive, insurance should be part of a car-buying process, not an afterthought," Belden said.
Your state insurance department can help you find out whether there have been complaints against insurers that operate in your state. For more information, go to the consumer Web site for the National Association of Insurance Commissioners, www.insureuonline.org.
