Car Insurance

My car insurance has doubled over the past few years: The company says the state has allowed it to raise the rate. I’m fed up with the high cost of insurance. Where can I find information to help me choose a new carrier?

As with any other consumer good or service, it’s a good idea to shop around when contemplating a new insurance carrier. The forms take about 15 minutes to complete, and it’ll be well worth the effort if you save hundreds of dollars in the process. When you use these sites, you may not get instant quotes. Some companies may contact you directly via a sales representative.

As you enlist competitive quotes, Edmunds.com, a consumer automotive site, advises you to take note of the following:

* Keep coverage rates the same so that the old and new information are comparable.

* Locate an 800 number for answers to questions not found online.

* Ask about the company’s payment policy.

* Find out what discounts pertain to you.

Prior to making a final decision, contact your state’s department of insurance to get the consumer complaint ratio and ask local auto body shops for recommendations. Before you drop your current coverage, call your insurance carrier for details because you don’t want to have any lapses in your coverage.

The Auto Club Group (ACG) - the largest affiliation of AAA clubs in the Midwest - announced today (February 9) the launch of a new online insurance quote system that allows customers to obtain a competitive, real-time insurance quote any time of the day or night.

“Consumers shop in many ways today, and we keep pace with their preferences by offering multiple channels through which they can purchase AAA-branded products and services,” said Steve Monahan, president and COO of the Auto Club Insurance Association (ACIA). “These channels include our call centers, along with our branch network, sales offices and the Internet.”

According to Monahan, ACG’s new online consumer quote system, enhanced current capabilities by allowing a consumer to request and retrieve a real-time quote 24/7. Easy to use and attractively designed, the new online quote application includes a retrieval mechanism that allows the consumer to store a quote for up to six months.

In addition to the storage function, there is a group discount page that can help consumers identify possible savings opportunities, and there is a display of four different coverage packages - minimum, low, medium and high - to present a variety of pricing and coverage options. Also, a quote can be customized to meet any consumer’s specific needs.

Obtaining an insurance quote at AAA.com involves a quick and easy 5-step process. The online quote tool collects driver information, driver history, vehicle information, driver/ vehicle assignment and desired coverages.

The very first screen the consumer will see after entering his or her name and address is the group discount page, which has links to various banks, chambers of commerce, credit unions, employer groups and other group affiliations. Each of these pages has a drop-down menu that allows the consumer to easily select his or her group.

The discount applies to all vehicles insured under the policy when at least one household resident belongs to a qualifying group. The discount is automatically applied as part of the quote process.

At AAA, a wide variety of rating discounts are available to qualified policyholders. For example, with two or more vehicles insured, you may qualify for a multiple-vehicle rate. If you insure your car and your home or have life insurance through AAA, you may qualify for additional discounts. If the insured vehicle is equipped with certain anti-theft or safety devices, or if the driver pledges to wear his or her safety belt at all times, even more discounts apply.

For consumers who are not familiar with insurance terms such as “Personal Protection,” “Residual Liability,” or “Uninsured/Under-Insured,” the online quote tool offers a coverage guide that explains about No-Fault insurance and mandatory and non-mandatory coverages, enabling the consumer to determine the best coverages for his or her needs.

The AAA.com web portal also provides consumers with the means to find an agent, make online payments, make changes to a policy or even report a claim. It’s quick and easy and can be done from the comfort of your own home.

“We are very excited to introduce this great new functionality for our potential customers,” said Monahan. “The online quote system allows us to provide one-stop shopping for a growing number of people who use the Internet to gather information before they make their purchasing decisions. And with AAA offering new, competitive pricing, multiple discounts and award-winning claims service, we’re sure that decision will be an easy one.”

AAA offers automotive, travel, insurance and financial services to more than 49 million members in the United States and Canada. AAA Minnesota/Iowa is part of The Auto Club Group, with 4.1 million members in eight Midwest states.

Provident Financial, the door-to-door lender, has offloaded its car insurance arm for [pound]170m ahead of its planned demerger. The move drew a downbeat reaction from analysts, who said the price was a disappointment. The unit was sold to GMAC Insurance Holdings, part of the financial services arm of US carmaker General Motors.

Provident plans to spin off its international arm. The car insurance arm has long been considered non-core and the company will book a [pound]70m one-off gain. Shares finished unchanged at 810p.

When a teenager gets a first car, the event is a big rite of passage. For parents, the event can amount to a big passage of money to pay for the new driver’s insurance.

Right off the bat, get ready to shell out some big bucks. Auto insurance for a teen driver generally costs from 50 percent to 300 percent more than what an older driver with several years of safe driving experience pays, according to the Independent Insurance Agents of America.

But there are steps parents can take to help cushion the cost, which can run hundreds of dollars higher than their own auto insurance premiums.

“Yeah, it’s a big investment,” Willie Yee, an Orinda resident, said with a resigned sigh.

In March, he purchased a AAA of Northern California auto insurance policy for his 17-year-old son Darren. But Yee was able to save money because Darren qualified for a good student discount, which requires at least a “B” average.

“Even then, it’s very expensive,” said Yee. “The cost of insurance is what we expected, even with this discount. Everyone knows it costs more to insure a teenager.”

The main reason it costs more is that teen drivers have no previous driving records that insurers can use to help determine a premium, according to state Department of Insurance spokeswoman Nanci Kramer.

Another reason is that teens have the highest accident rate of any age group in California. While drivers between the ages of 15 and 19 years accounted for 4.1 percent of licensed drivers in the state, teen drivers were responsible for 9.4 percent of fatal collisions and 10.2 percent of injury collisions, according to a 2000 report by the California Highway Patrol.

Typically, at around age 21 and then again at 25, insurance rates drop dramatically for good drivers, said Kramer. Such drivers are defined as those who haven’t gotten a moving violation or been in an accident for three years.

Under state rules governing insur-

ance, companies can — but aren’t required to — offer a discount for licensed drivers with at least a “B” average in high school or college, provided their driving record is free of accidents or moving violations. Some companies offer a discount for students who have passed a driving class, whether in high school or through private lessons.

“It pays to shop around,” said Kramer. “The key is to ask what discounts are available.”

For example, AAA offers as much as a 10 percent good student discount, 21st Century Insurance has a 10 to 15 percent discount, and State Farm Insurance a 7 to 26 percent discount. However, none of these offer a discount for taking a driving class.

Fireman’s Fund Insurance offers a 2 percent discount for taking a driving class and a 10 percent good student discount. And Farmers Insurance offers a 20 percent good-student discount and a 19 to 31 percent for driving school.

Many insurance companies offer a multivehicle discount for cars insured under one policy.

Some insurers, such as AAA of Northern California, require a teen’s car to be registered in a parent’s name or have the car registered in both the teen’s and parents’ names before an insurance policy is issued for the teen driver. Others, such as 21st Century, will provide coverage on a car registered in the teen’s name as long as it’s insured under the parent’s policy.

“If you go under the family plan, it will cost less than if the teen goes out on his own and tries to get a policy,” said Omar Morales, spokesman for the Insurance Information Network of California.

While discounts can help bring down the price of a teen’s policy, other factors also can play a role in setting the price of any premium no matter how old the driver is. The type of vehicle, along with the distance that the car will be driven on a daily basis, are among several factors insurance companies use to set premiums.

For example, Yee’s son drives a 1992 Honda Accord, a car that’s going to cost less to insure than a high-performance sports car.

“Choosing a safe, more sensible car for a teen may not be the sexiest choice, but it is a smart choice,” Morales said. “It could even mean lower auto insurance costs.”

Besides taking advantage of discounts, there are other ways to reduce premiums.

“A lot of things you should try to do to cut down on the bill for teens are the same things that can help you in general with insurance,” said Jenny Mack, spokeswoman for AAA of Northern California. “Choose a low-problem car.”

Increasing a policy’s $250 deductible for collision and comprehensive coverage up to $500 or $1,000 can save 10 percent or more off premiums, according to the Independent Insurance Agents of America. Let the teen driver know how much the insurance costs, the group advises, and have him or her pay all or some of the premium.

Being smart about insurance isn’t all about saving money on premiums.

One thing to consider, said Dan Cohen, spokesman for 21st Century Insurance, is to increase the deductible and use the savings to provide more liability for medical and property damage.

You can save on your car insurance-if you know where to look. Which of the following do you see as possibilities for saving on insurance?

1. Your car is equipped with anti-lock brakes,

2. Your teenager has just gotten a driver’s license.

3. You and your spouse are over 50.

4. Your car has an anti-theft device.

5. You live in the inner city and park on the street.

6. Your teenager has completed driver’s education.

7. Your teenager is in the top 20 percent of his or her class.

8. Your teenager goes to college 100 miles from home and has no car at school.

9. You park in a garage.

10. You own your home.

ITEMS 2 AND 5 WILL RAISE YOUR INSURANCE COSTS. But all the others offer options to save on insurance. If your car has special equipment that makes it safer to drive, like anti-lock brakes or running lights, or if it is protected from theft and vandalism, you can save money. Ditto if you and your spouse are over 50, have clean driving records, good credit, and demonstrate stability such as owning your home or living at the same address for several years.

Teenagers can wipe out your insurance budget. But you’ll cushion the blow if your teen gets good grades, takes driver’s training, or is at college without a car.

Be sure to tell your insurance agent about any of these factors that could lower your rate. While you’re on the line, you may want to pare your premiums by increasing your deductible for collision coverage. Doing so means that you will pay more of the upfront costs if you have an accident. But if you’re a good driver, you’re betting against the odds of an accident. You can also drop collision insurance on older cars that are already paid for.

Check out the NEA Member Benefits Web site to learn more about home financing, insurance programs, and other topics. No member dues dollars are ever used to support NEA Member Benefits programs.