Posts Tagged premiums

10 Ways to Save on Car Insurance

How to save on your car insurance

Is your teen driver driving you to the poor house? Did your insurance rates take a huge increase with no change in your driving record? It may be time to review your auto policy to make sure you’re not over-paying. Here are 10 tips to keep your auto premiums in tip-top shape.

  1. Check your driving record.

Your driving record can have a big influence on how much you pay for car insurance. When your insurance is quoted, they run two reports: 1) Clue Report, this includes claims data turned into insurance companies, and 2) Motor Vehicle Report, this comes from the DOT and includes information reported by police like violations and accidents. Clue Reports can be inaccurate so should know the correct driving records of every driver on your policy and record the date and type of incident, including:

  1. Traffic violations
  2. Accidents (both at-fault and not-at-fault accidents such as someone rear-ending you)
  3. Comprehensive claims (like deer strikes, hail, glass damage, vandalism, etc.)

Ask your agent (and anytime you quote new insurance) what incidents affected your rate. You can dispute inaccurate information, but you may need to show proof to get items removed.

  1. Maintain a good driving record

Obviously, if you obey traffic laws and drive safely, you’ll get into fewer accidents and violations. Make safe driving a habit. Consider taking a safe driving course, some companies offer discounts for doing so, but even if they don’t, it has its own rewards.

  1. Participate in telematics programs

Telematics are devices that monitor your driving habits, such as mileage, time of day, fast braking, speed, mobile distraction and others. Insurance companies offer discounts of 5% to as much 50% depending on your driving habits. Find out of the insurance company will raise your rates if your driving habits are unfavorable, some do not. Driving apps that you install on your mobile phone are gaining popularity among carriers as some offer both choices. Since you can monitor your own driving with these devices it is an opportunity to improve your driving habits.

  1. Check insurance before buying your vehicle

Not all vehicles are created equal when it comes to the cost to insure them. Obviously a more expensive car will cost more to insure, but other factors play into it as well. Luxury and less common makes are often more expensive to repair and get parts if they are in an accident. Sportier cars or vehicles that can be used off-road cost more too. Get the VIN of the cars you’re considering and have your agent quote them first.

  1. Maintain good credit

Credit score can have as big of a factor on your rates as your driving record. Pay your bills on time, keep credit card balances low and dispute any discrepancies on your credit report.

  1. Shop your insurance

This is perhaps the biggest key to lower rates and yet many people are reluctant to do it. Perhaps it intimidates people who think they may unwittingly end up with less or inferior overage. Always insist on getting an apples-to-apples quote with your current coverage so you can compare fairly. While many insurance agents sell only one carrier, you can get quotes from multiple carriers from independent agents and brokers. Search for independent agents on Google and ask what carriers they are appointed with. That way you can get competitive quotes from more companies.

  1. Don’t assume advertised insurance companies are any better/cheaper than non-advertised ones.

Advertising is very costly and adds to an insurance company’s overhead. While brand recognition may help instill your confidence, advertising in its self doesn’t make a product any better. Some of the best values in insurance can be with small insurance companies you never heard of before. Also don’t assume a particular brand always has a better rate. All insurance companies have their own rating factors to determine what type of customers get the best rates. The company that was good for your brother-in-law may be a poor choice for you.

  1. Maximize discounts

Some of the biggest discounts include multi-vehicle and multi-policy discounts. Therefore, bundling home and auto insurance with the same company is usually cheaper. Paying your policy in full gives you an additional discount vs. monthly pay. Ask what discounts you are getting now and what other discounts are available, but not currently getting.

  1. Consider increasing your deductibles or reducing coverage on older cars

The lower the deductible, the higher the premium so you will save money by raising your deductibles. If the car is financed be sure to check with your loan company to see if they require a maximum deductible limit. If you have an older car or is worth less than $5K and is paid off, consider dropping comprehensive and collision coverage. A rule of thumb is if your comp and collision coverage costs more than 10x the value of the car, consider reducing coverage.

  1. Go easy on optional coverage

You’ve seen the commercials that advertise “accident forgiveness” or “disappearing deductibles.” What they don’t mention is those options often cost you more and they aren’t necessarily right for you. Watch the cost of rental reimbursement, GAP coverage and roadside assistance to make sure you feel the benefit is worth the extra premium.

Getting your best rates requires some diligence on your part and combined with a little knowledge you’ll get the most for your money. Take control of your insurance today!

 

Posted in: Insurance Tips

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Nation’s Lowest Auto Insurance Rates

Auto insurance rates

States with the Lowest Auto Insurance premiums

Do you feel like your auto insurance rates have gotten out of hand? Be thankful if you don’t live in Michigan, Oklahoma or Louisiana. Residents there pay more than $2,000/per year on average to insure each vehicle. Iowans may also complain about raising rates, but should take some comfort in knowing they pay the lowest auto insurance rates in the nation! According to the November 2017 newsletter for Independent Insurance agents of Iowa, Iowans pay on average $1,125/year for auto insurance. Premiums vary by zip code and are based on the loss (claims) experience of insurance companies in each zip code. Therefore rates can vary widely even within a state. For example people in Detroit zip codes will pay a lot more than those in Marquette, MI.

Iowa’s lack of large urban areas helps reduce traffic congestion and accidents. However lower crime rates (theft and vandalism) as well as relatively fewer weather-related losses also work in the state’s favor. On the other hand, Iowa was the fourth highest state for deer-vehicle collisions last year according to State Farm. Of course the car you drive, driving records, credit history and age and experience of the driver(s) are important insurance rating factors too.

Uninsured Motorists

Iowa also is the 12th best state for the lowest percentage of uninsured drivers at just 8.7%*. This is despite the fact that Iowa doesn’t have a compulsory insurance law. Iowa’s Financial and Safety Responsibility act requires that drivers have the financial means to cover injury or property damage to others. Financial responsibility can be satisfied either from one’s personal wealth or with auto liability insurance.

The top 10 states with the lowest average auto insurance premiums are ranked below, with Iowa being the lowest:

  1. Iowa
  2. North Carolina
  3. Ohio
  4. New Hampshire
  5. Maine
  6. Idaho
  7. Wisconsin
  8. Kansas
  9. North Dakota
  10. Arizona

* Percentage of uninsured drivers, as measured by the ratio of uninsured motorists claims to bodily injury claim frequencies. Source: Insurance Research Council, 2015.

Get a quote from a Cedar Rapids auto insurance agency.

 

Posted in: Industry News, Iowa News

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Where are the best Auto Insurance rates in Cedar Rapids?

Where are the best Auto Insurance rates in Cedar Rapids?

Everyone knows that car insurance rates can vary by driver and vehicle as well as risk factors like driving record, vehicle use and mileage. But did you know that you can pay different rates depending on what part of Cedar Rapids you live?

Recently, a customer moved from one Cedar Rapids zip code to another. With no other changes, their auto insurance rate increased by $100 over the 6-month term. I thought it was unusual for such a large difference within Cedar Rapids and was curious how much your zip code affects your auto insurance rates. Using the same customer, I checked rates in each zip code in the metro area and here are the results:
 

auto-rates-by-zip

 
 
 
 
 
 
 
 
 
 
 
 

 Note: an index of 1.02 means this zip code is 2% more than the 52402 zip. This example was checked on Progressive. Each carrier sets their rating factors with approval from the Iowa Insurance Division who regulates insurance rates in the state of Iowa. Therefore, it’s important to note other carriers will not have the same rate differentials for the same zip codes.

In this example, the driver would pay $231 more in the SE Cedar Rapids zip code versus the NE zip code. I would’ve expected a large rate differential when moving to another state, as Iowa on average has some of the lowest auto insurance rates in the nation.

Why do auto insurance rates vary by location?

Insurers keep claims data by zip code. Those areas with higher rates of losses (insurance claims) will pay more than those with lower rates of loss. A higher number of accidents can lead to increased liability and collision coverage rates. Similarly, more losses from storms, deer strikes, vandalism or theft can lead to paying higher premiums for comprehensive coverage. For example Oklahoma has more severe wind and hail storms than Iowa does. Therefore you’ll pay more there for comprehensive coverage, which covers such loses, than in Iowa due to the increased risk.

It surprised me how much just moving across town, or in some cases just across the street, can affect your auto premiums!

 

Posted in: Cedar Rapids News, Insurance Tips

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