16 Ways To Save On Your Auto Insurance

North Bergen, New Jersey:  In many States, such as New Jersey, auto insurance costs have increased significantly, even during this recessionary period.  So I would like to share some ways to perhaps help lower your auto insurance cost.

Let me premise by saying that certain vehicle operator demographics lend to reduced insurance rates.  Most insurance companies provide preferential rates to drivers with one or more of the following characteristics:  Homeowners, married couples, drivers with more than one vehicle, drivers in areas with lower traffic and population densities, older drivers, and of course drivers with clean records.  The ideal insured for an insurance company is the family who owns a home, has 2 cars or more in the garage and very young kids at home, or adult children no longer in the household

Some drivers believe that just because they go to court to eliminate or reduce points associated with a moving violation, that the violation itself is erased from their MVR record.  In most cases this is not so as the violation remains on their record for several years.  Also, keep in mind that many insurers now go back 5 years in reviewing a driving history to determine the insurance score and the corresponding rate

Notwithstanding, there are several things to observe to help lower your auto insurance rate. 

1)      If you have points in your record, take a state approved driver safety course which can reduce your premium by 5 to 15%.

2)      Young drivers (under 22 years of age) are charged much higher rates, but they can get credits for being a good student and getting a “good student certificate” from their school/university.  They should consider buying a more modest or older vehicle rather than a newer car that will require full coverage which can add 30 to 50% to the cost of insurance.  Driver rates should drop significantly once they reach 24 or 25 years of age.

3)      Safety Matters:  When purchasing a vehicle, consider cars with above average crash test results, and an excellent car safety record.  Insurance rates are lower for vehicles earning higher safety scores.

4)      Guilty by Association:  Also, consider purchasing a car that has a lower accident profile.  Certain vehicles tend to be prone to more accidents than others, and the insurance companies will punish all drivers of that type of vehicle by charging them higher rates as a group.

5)      High Performance costs money.  The style of the vehicle also matters.  The sportier and faster the car, the more expensive the insurance will be.

6)      Loyalty matters:  Due to these difficult economic times, and the ease of shopping for insurance online, some drivers seem to switch insurance companies every time their policy comes up for renewal.   This will hurt their insurance score and increase their rate over time.  All companies have more competitive rates or offers from time to time, but that does not mean that once they hitch you with an attractive rate that they won’t increase your rate shortly thereafter, or at renewal.   It is advisable to stay with your existing company for the long haul.

7)       Lapse in coverage; lapse in judgment:  Letting your policy expire (lapse), before you replace the coverage will cost you greatly; especially a lapse of more than 30 days.  Some companies will decline to insure you if you have a lapse in coverage.  Other companies may refuse to reinstate you even if you offer to make restitution by paying the past due premiums. Trying to save money by skipping a few months of insurance premiums never pays off.

8)      Avoid the Biggies:  certain violations will cost you a bundle, such as speeding 15 miles over the limit, DWI, DUI, running a red light, driving with a suspended license, at-fault accidents, and more.  Many companies will decline to insure you for one or more of these types of violations over the prior 5 years. By the way, in New Jersey an at fault accident counts as 5 points!

9)      Unlucky 7:  If you have 6 or more points (2 or more moving violations within 3 years), you will be declined by most of the preferred carriers; you will have much fewer choices, and therefore will most likely have to purchase your insurance from more expensive carriers. 

10)  To each their own:  Never lend your car out to anybody.  Since the vehicle is registered under your name, any accident that they are involved in will be credited to you.  Insurance companies do not care that you were not the driver, but you are considered to be negligent by lending your car to another driver. 

11)  Higher Credit; Lower Rate:  Many companies provide lower rates for those with above average credit, as these are perceived as more stable and responsible individuals, needless to say more responsible drivers as well.

12)  Drive Safely.  Although obvious, some drivers are not aware how expensive insurance gets once they accumulate points in their driving record, add an “at-fault” accident to 4 or more points and your rate can easily double!  Many insurers will also decline coverage to drivers with this type of record.

13)  Location, Location, Location: If you live in a high population urban area with a high density of vehicles, you will be charged higher rates than those in lower traffic density areas.  The more vehicles in an area the more accidents that naturally occur.  If practical, sometimes moving to another nearby town can significantly lower insurance rates.

14)  Avoid filing unnecessary claims.  If you have a $1,000 deductible, and sustain a $1,200 comprehensive claim (i.e. equipment was stolen from your vehicle), it may be best to not file the claim and just absorb the $1,200 rather than file a claim of $1,200 when you will only be getting $200.  This claim will show up as an accident - comprehensive in your record.

15)  Car Pool and save:  The number of miles you drive each way to work will affect your rate.  If you can carpool to work a few days a week, or move closer to your job, this can help reduce your rate as well.

16)  Pay those parking tickets.  Although not a moving violation, unpaid parking tickets could lead to a suspended drivers license, and if the driver is unaware that her or his driver’s license was suspended for non-payment of tickets, and he/she is pulled over for a moving violation, this person will now have a very serious infraction on his/her record.  In addition, the vehicle will most likely be towed away; additional fines and higher rates will follow, so who needs all of that aggravation. This is another example of how a small oversight could lead to much higher rates.

I hope this information has been helpful.  Best regards and please drive safely and responsibly.

By Robert Hernandez, President, Frontier Insurance Agency, LLC

Robert is founder and President of Frontier Insurance Agency, a New Jersey based insurance agency offering auto, home, and business insurance products and services in New Jersey.  For more useful insurance related articles and information visit:  www.frontierinsuranceagency.com

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