The raging national debate over insurance reminds people, that we have been here before. Once upon a time, obtaining an auto insurance policy was much more cumbersome, and much more expensive. Ultimately, consumers profited from a basic set of dual reforms to the auto industry: increased competition and the emergence of new technologies. And of these two, many experts argue the ability to allow auto insurance sales across state lines was by far the most important.

Indeed, many of the savings discussed in this article reflect this truly, new competitive arrangement. Unfortunately, with the significant savings available to individual customers, too many people still fail to shift gears and study how they should be managing their auto insurance.

Realize Savings Strategies

Long- and short-term strategies are quite distinct, and often occur at varied points throughout the auto insurance process. It is vital to asses all covered individuals, at varied times, to make sure the following savings are being accounted for:

Short-Term

• Most frequently, when shopping for a policy, the keys are to volunteer reasons you are going to be a good (i.e., low risk) customer. There are potentially dozens of discounts available…here are some of the most common:
• Safety Features. Many vehicles now boast a variety of factory features; it may be worthwhile to retrofit some of the features.
• Lapsed Insurance? In hard economic times, it is common for people to drop their insurance. But once a policy has been lapsed, typically for as few as 30 days, then the costs may double for a new policy. But be sure to explain why your policy has lapsed, if there is some logical reason…have you been out of the country, or simply did not drive? Some policy carriers may make an allowance.
• Combination Coverage. Listing your home or rental with your auto policy may save money…but be careful this does not result in an unmonitored increase in one policy over the long-term.
• Buyer’s Remorse. Always check and compare the insurance costs when calculating whether you can afford that new car.
• Old Car ‘discount.’ Not only is an older car cheaper to own, but you can have lower coverage levels. A good rule of thumb for eliminating or lowering collision and comprehensive: if your old car is worth less than ten times that coverage costs.

Long-Term

While virtually everyone knows to shop and compare, and compare and shop: not enough people make it a practice to do the same thing in the long run…certainly by the time of renewal. Furthermore, changes in financial circumstances are often good reason to review auto policies…one of the most common areas of personal liability.

• Loyalty Discounts. Mist auto insurers now acknowledge the high levels of competition…if you stay with one company (often for as little as one year), ask for any discounts. Crucially, then compare the best rate you can get by shopping around.
• Check Credit. Lawsuits have unsuccessfully challenged the use of credit reports in calculating insurance…for the simple reason low credit scores have been shown to relate to increased claim activity. Checking your credit not only protects your identity: it guards your driver’s license.
• Retirement Discount. Once you move out of the fast lane, you may expect to receive a significant discount.
• College Kids. Once your covered kids go far enough away, you can receive significant savings (perhaps even 50%).
• Birds of a Feather? If you sign up for a group membership, you may receive low introductory offers. While viewing these offers skeptically, there are instances where professional memberships (especially in credit unions) will result n significant savings.

The bottom line is to assume a more proactive role in defining your auto policy and the services you expect. Most insurance policies increase 40% after a first, at-fault accident: so being a safe driver is the best way to save, long- or short-term. Yet, while insurance is typically something we buy, and hope never to use, there are instances where cost-savings continue after an accident.

1. Be certain any police reports are accurate, and do not improperly fault you. In short, read the accident report.
2. If you encounter serious misunderstandings with your policy, from cancelation to declines, consider filing a complaint with your state’s Insurance Commissioner.
3. Some trade practices may occur that seem discriminatory or unfair: virtually every state now has a system (typically through the state attorney general in your state capital) for taking in consumer questions. Insurance inquiries typically lead the list of most common questions.

Conclusion

Once a person begins to focus on savings strategies, there is another upside…they intrinsically begin to avoid many related, but quite distinct, unneeded costs. Typically, competing insurance companies are much better at showing savings.

Finally, distinguish between short- and long-tem strategies. This means you must be willing to revisit your auto insurance periodically. One of the most common consumer complaints about auto insurers comes from ‘policy creep.’ These changes in accounting are virtually always in the rear view mirror…and much closer than they appear.