Before You Buy
Choose your car carefully. Sports and specialty cars generally have the most costly claims records and are also favorites of thieves. Insurers frown on cars that offer less crash protection for drivers and passengers during an accident - often small imported cars. Insurers are also wary of cars with powerful engines that could get unskilled drivers into trouble. For example, some insurance companies classify any car that has a turbocharger or a zero-to-sixty time of less than seven seconds as a high-performance vehicle and - pardon the pun - charge a premium.
Many insurers now review the credit ratings of applicants. Insurance companies find that a poor credit history may be an even better predictor of future losses than an applicant’s driving record. Consequently, insurers are rejecting applicants with bad credit ratings. If it's any consolation, if you’re denied coverage you have the right to ask why.
Some insurers offer discounts that can reduce your total insurance premium by 5% to 40%. Ask your insurer about the following discounts if you think they might apply to you or your vehicle:
Low annual mileage or restricted mileage;
Air bags and anti-lock brakes;
Good-driver discount for having no accidents or moving violations in the past three years;
Multi-policy discounts for insuring more than one car with the same company or signing up for car, life, homeowners or other policies with the same company;
Completion of driver training courses;
Anti-theft devices, such as ignition or fuel shut-off devices and alarm systems;
Non-smoker discount;
Drivers between the ages of 55 and 65;
Carpooling to work;
Student drivers with good grades (usually a B average or above);
Belonging to a service organization or alumni group;
Having a professional accreditation such as a CPA or a specific occupation such as engineering.
After You’ve Bought
Keep a clean driving record. No single factor is more important than your motor vehicle report (MVR) in determining the premiums for your liability coverage. Each time you receive a traffic ticket, you risk increasing your future premiums. In general, you will pay substantially higher premiums if you receive more than one or two tickets during a three-year period. If your state allows you to attend traffic school in exchange for removing a violation from your MVR, take advantage of the option.
Think hard before making a claim. Claims, as well as tickets, upset insurers. Don’t involve your insurance company in repairing door dings or annoyances like cracked windshields even if you could collect a little something beyond your deductible. Pay for these repairs out of your own pocket. If someone damages your car and you don’t live in a no-fault insurance state, try to collect from the other person’s insurance company before you involve your own insurer. Obtain a police report that indicates you were not at fault in the accident.
If you own a business, put your car in your company’s name. Discuss with your insurer how you’ll use the car. You may be able to persuade the insurer that writes your business policy to cover the car as a company vehicle at a lower rate than you’d get on a personal policy.
Get married. (Okay ... that might cost more than the insurance!) Insurers prefer drivers between the ages of 30 and 65. Some insurers give discounts to drivers aged 55 to 65. But once you’re over 70 you’re considered risky, as you are if you’re under 30. However, insurers generally treat a married person under 30 as they would someone in the lower-risk 30-65 age group. Marriage, they figure, puts an end to your partying days and keeps you off the streets at night.
Every time you receive your insurance bill, review your coverage. Make sure your bill is accurate and that you’re getting all eligible discounts. If there’s been a change in your insurance profile (e.g. you just turned 30), inform your insurer. Consider eliminating your collision coverage if your car is more than ten years old or if that portion of the premium costs more than one-tenth the value of the car.
