How to cut insurance costs
A little comparison shopping can pay off with a policy that costs hundreds less.
Accidents happen. In cars, they happen nearly 100,000 times a day, and insurance can be the only thing standing between you and financial catastrophe. But you don’t have to resign yourself to paying sky-high insurance premiums, even if you have a less-than-perfect driving record.
To find out just how much real people with real driving experiences could save, we picked a family and a single man and did the shopping for them. Among the startling results:
* The highest semiannual premium quoted for our single man’s policy ($1,727) was more than triple the lowest premium ($533)–for exactly the same coverage.
* The highest six-month rate for our family’s policy ($2,100) was more than double the lowest rate we found ($890).
* The companies with the best deals for our family quoted rates that were among the worst for our single man.
The enormous price differences and lack of consistency illustrate the most important point about searching for affordable auto insurance: You have to shop around. Every insurer has its own formula for setting premiums–a complex combination of variables including your age, sex, driving record, where you live and the kind of car you drive. You will be richly rewarded if you take the time to find the insurance company whose criteria shine the best light on you and your family.
Reality check #1
The family we shopped for includes a teenage son who started driving a couple of years ago–a notoriously expensive addition to any family’s policy. When we priced policies last year, he had already received two speeding tickets, and Mom had also gotten pulled over for speeding. Such incidents aren’t terribly out of the ordinary, but the combination made the family untouchables in the eyes of some insurers.
For the past few years, they had relied on an independent agent to get them the best deal on insurance for their 1989 Mazda MPV minivan and 1990 Toyota Celica. They were paying $1,061 every six months for car insurance, including:
* $100,000 liability coverage for bodily injury and property damage;
* $2,000-per-person medical payments coverage;
* $100 deductible on comprehensive coverage;
* $200 deductible on collision coverage; and
* $100,000 uninsured- and underinsured-motorist coverage.