Drivers should take advantage of all discounts that many providers offer, that can significantly reduce the cost of car insurance. Understanding discounts and how they can affect auto insurance premiums can help smart shoppers make better decisions about their coverage and possibly save themselves some money in the process.

Read below to identify possible discounts that could help you save on auto insurance this year. Other than discounts, there may be some other ways for you to save on your insurance premiums. We will go over several discounts that can help with your current situation.

First, there are discounts for Auto Safety features. Certain states will give you discounts for anti-lock breaks. Make sure you know if it is two or four wheel anti-lock break vehicle. Automatic seatbelts and airbags are frequently discounted on your insurance premiums. In most states, a defensive driver class discount may apply. If the principal driver usually 55 years old or older has completed an approved defensive driving class a discount could apply. Keep in mind that most states will only approve this class if it is voluntary meaning that it was not the result of a violation or infraction.

Some insurers will give you a discount for having multiple vehicles. In some cases, this will only apply if you have two or more drivers. If you have a clean driving record, meaning you do not have any tickets, accidents or suspensions in the last three years (some companies require five years) then you could be eligible for a safe driver’s discount.

Many companies will reward you with staying with the same insurance company for many years without any accidents reported. They will offer you a renewal discount. It makes sense, you have carried insurance with a company for several years, and have not had an accident, your insurance company likes you and wants to reward and keep your business. Some companies honor you with a discount if you had prior limits on your previous policy. They discount you because they understand you are a better risk.

Conversely, if you do decided to change insurers a proof of prior insurance discount may apply. Most insurers request at least 6 months of consecutive insurance from the previous insurer. If you are a full-time student who meets certain grade requirements and are unmarried and usually under 25 years of age (some states the age is 21) you could be eligible for a good student discount. If you own a home, including condominium, town home, or mobile home, which is used as a principal residence, a discount could apply. Military personnel either currently active or retired from any branch of the US military a discount could apply. If your vehicle is equipped with an anti-theft device, a discount could apply.

You could lower the cost of your insurance in other ways. For people who own older cars, it may not be necessary or cost-effective to protect them with collision and comprehensive coverage. By comparing the book value of your vehicle and the premium that the insurer has offered, you may find that it cost as much for the insurance as it does for the vehicle. If the car is worth less than $2,000, you will probably spend more insuring it than it is worth. The whole idea of driving an older car is to save money, so why not get what is coming to you.

In addition, keep in mind that the type of vehicle you buy could greatly affect your premium. A flashy red sports car is usually going to cost more to insure than a mid sized sedan. This is also true of vehicles that are on the list of most stolen. There are many ways that policyholders can save on their insurance. Knowing more about auto policies and premiums can help consumers take advantage of less obvious discounts while ensuring that they have the appropriate protection for their vehicles. The last way to save is to assume more risk. If you chose higher deductible on your Personal Injury Protection or Comprehensive and collision coverage will lower your premium as well. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.

Understanding how discounts affect your insurance rates is important to save you money.

By: John Tahan

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reeder_rabbits asked:

I was reading CNN money and it states that, “Insurers provide discounts to reward behavior that reduces risk. However, Americans waste some $300 billion a year because they forget to ask for them!”

I was wondering if people could share the insurance breaks they receive from their auto loan providers.

Today’s Texas auto insurance market does not seem to have senior drivers in mind when it comes to lower rates. Even when actual car use has diminished, some mature drivers find themselves paying higher premiums. The problem is not that Texas insurers are attempting to push senior drivers into a position of unaffordable auto insurance. The reality is simply that changes in pricing structure have made it more difficult for individual seniors to understand all of the factors that may apply to rate reduction. Consequently, senior drivers are often unaware of the specific ways in which their auto insurance rates may be lowered.

Senior drivers looking to lower their premiums on auto insurance should review their policies taking the following considerations into mind.

* Driver classification – Commonly described as automobile usage, a driver classification specifically defines the type and amount the auto will be used by the insured senior driver. Types of usage include “to and from work” or “pleasure only.” A senior’s driver classification may also take into account the decreases in mileage annually. Some seniors use their vehicle only on special occasion, which could result in further rate decreases. A senior looking for lower auto insurance rates should make sure the carrier is aware of the actual vehicle usage, and that this factor is being taken into account in the rate calculations.

* Drivers history – Auto insurance carriers in Texas use these three major indicators in underwriting policies and determining rates. It is recommended that all Senior drivers make their driver’s history as “clean” as possible. One should contest all moving violations when possible, and cover others with defensive driving courses.

* Claims history – A Senior’s claims history carries significant weight as well. The Texas Department of Insurance requires carriers to record all claims reported to them by the insured. With this in mind, it is important to understand that when contacting an insurance representative, one should specify whenever the call is for information only. Otherwise, it may be recorded a filed claim, thereby affecting your claims history and possibly rates.

* Financial score – Senior drivers should do whatever they can to improve their financial score when looking for low auto insurance rates. Stability and debt ratio are major factors that carriers take into account when underwriting a Senior’s policy. Seniors that have reduced their financial obligations should make sure their financial scores reflect this, and alert their insurance agents whenever such information has changed.

As with all types of insurance, seniors should feel that their carrier’s representative is willing and able to take the time needed to discuss and adjust the auto insurance policy to their clients benefit. George White understand the importance many seniors place upon the ability to contact a human being that can give them the personal time and attention they need to feel confident and secure about the auto insurance policy they receive. For this reason, George White will make sure to speak with you on an individual basis about your policy, and how lower rates may be attained. If he cannot offer you the lowest possible rate or the best policy appropriate to your situation, he will refer you to someone who can!

Give George White a call today toll free at 866-663-5262 to learn more about how you can lower your auto insurance rates by getting the type of coverage that is right for you!

By: G. M. White

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blueeyedblonde224 asked:

I am a 21 year old female driver of a 2002 Mitsubishi Lancer OZ Rally. It’s the cheaper, basic version of the turbo-charged “2Fast2Furious” racing inspired Mitsubishi Lancer Evolution.

I have never had an accident or received a ticket for anything (I have yet to even be pulled over!) knock on wood! So I have a clean record….but my insurance per month is $185 through Citizens Insurance!! and it just recently went down from $205!
That’s including multi-car, multi-policy, good student discounts too…

I know an option is to sell the car…but it drives like brand new and I have put so much into it (basic maintenance….no, I do not race it at all…it is completely stock), it is the best little car and has never given me any problems except for insurance. I would be afraid to sell it for some other used car that would be better on insurance but end up costing me more in maintenance in the long run
The car is also completely paid off, so that’s not a worry

Back in the days before computers, auto insurance was personal and subjective. The insurance agent actually talked to the man he knew in the main office, called in a few favors, and got their best customers the best rates. Male drivers under 25 were charged a lot. Young females, being perceived as less risk, were charged much less.

Now, in the computer age, auto insurance companies have large databases of accident and claims records. By number-crunching these records they can tell what type of person is more likely to be a good driver and what type of person is more likely to be an accident risk. This ‘Black Box’ technology gives them insights into the background and behavior of the people who they think should pay more for their auto insurance. For example, people who carry minimum limits of liability are actually a greater risk than those who carry at least 50/100 ($50,000 per person, $100,000 per accident). And statistics have shown that those with bad credit scores are more likely to be involved in accidents.

In Texas, the minimum liability limit on auto insurance is 20/40. Yep. $20,000 per person, $40,000 per accident. Not much is it? And if that weren’t bad enough, the minimum property damage is $15,000. Guess who makes up the difference if you’re in an accident that’s your fault?

In most states, auto insurance is regulated by the state. But that is only the beginning. The state uses tables of ‘loss ratios’, exposure, and other conjuring words, to justify what the auto insurance companies want you to pay. Every once in a while, just to throw you off, they will even announce a state-wide REDUCTION in auto rates. When they do, hold onto your wallet!

After the state sets the base rate, the individual companies negotiate with them to adjust their particular rates, claiming either a better or worse loss ratio than average. So, after the elections are over, the legislature allows exceptions, amendments, and endorsements to jack them back up to something the auto insurance companies can make a ton of money from.

And there’s more. Most states allow individual companies to set their own rules to determine who gets charged what. So, one auto insurance company rates a particular driver one way, while another company rates the same driver differently. Each company sets those underwriting rules.

So how are auto insurance rates determined? First, the state usually gets involved. Then companies toss the dice between staying competitive and making as much profit as they can for their stockholders. And finally, now that the ‘Black Box’ is here, auto insurance companies are taking a closer look at every driver. Career, credit score, past record, even the city you live in helps ‘drive’ the rates. They have even found that those who select low limits of liability are greater risks than those who select higher limits. So, by raising your liability limits, you may actually lower your auto insurance rate.

For some, the new ‘Black Box’ technology reduces rates by as much as 20% over those companies not using it. The bad news is, since credit scoring does play a part in ALL auto insurance rating, the worse your credit score, the higher your auto insurance will go. No more ‘discounts’, no more ‘loyal customer’ credits, and the like. You will be rated right down to your underwear, placed in a group of drivers almost identical to you, and charged accordingly.

By: Gillian Gunner

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