HE-0662, Reprinted August 1998. Fred Waddell, Extension Family Resource Management Specialist, Associate Professor, Human Development and Family Studies, Auburn University. Originally prepared by Josephine Turner, Extension Program Specialist, Professor, Human Development and Family Studies, Auburn University.

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Shopping Tips For Auto Insurance

Getting the right auto insurance at the lowest possible cost isn't easy. Some things affecting your insurance cost are hard to control. For example, the rates you pay depend on where you live and the number of accidents that have occurred in your area. Rates are higher in cities where there are many people and traffic is heavy.

This circular gives tips you can use when shopping for auto insurance.

• When you buy a new car, shop for insurance before making your final decision. Insurance on some car models costs more due to higher repair costs. Coverage on sports cars often costs more than on larger cars such as station wagons.
• Your insurance company can give you a list of normal insurance rates for different models. You can find out the claims experience of many makes and models by writing to The Insurance Institute for Highway Safety, Publications Dept., Watergate 600, Suite 300, Washington, D.C., 20037.
• Shop around. Compare costs before you buy. Get quotes from three companies. Use the following table, "A Guide for Comparing Insurance Costs," to help. Check out policy prices that have the same coverage.
• Don't rely on just price when choosing a company. Check the company's record for service and its speed in settling claims.

A Guide For Comparing Insurance Costs.
Kinds Of Coverage	Limits You Want	Company #1	Company #2	Company #3
Bodily Injury: Liability	$___ per person
	$___ per person
Property Damage: Liability	$___ per person
Bodily Injury: Medical Payments	$___ per person
Bodily Injury: Uninsured Motorist	$___ per person
Property Damage: Comprehensive Physical Damage	$___ deductible $___towing
Property Damage: Collision	$___deductible
Other
	Annual Total:
	Installment Payments:

• Look for special discounts. If you and your family have had driver's training, have two cars, use seat belts, do not smoke or drink, or have had no accidents, you may get special discounts. Your premium may cost less if your car is not used for business or for commuting to work. Ask your agent about these and other discounts.
• If you're a driver younger than 25, your rate will drop if you marry or if you're not the main driver of the car being insured. It is usually cheaper for parents to insure children away at school than for the children to insure themselves. Some companies offer a "good student" discount for students who have an above-average school record.
• Check to see if your insurance company has a policy which combines car and home coverage with a lower premium.
• Choose a company that bills you directly for the premium instead of through the agent. Direct-billing can cut about 10 percent from your premium. Save more money by paying premiums annually or semi-annually. Monthly payments cost more.
• Deductibles on collision and comprehensive physical damage coverage let you do the most cost-cutting. The larger the deductible, the lower your premium. The deductible on collision us usually $100 or $200, but you can increase your deductible to cut your premium costs more.
• Depending on the insurance company, drivers age 50 or older may qualify for a discount. The discount is often as much as 10 percent.
• Think about buying more liability insurance. There is always a chance you could seriously injure or disable another person. Higher limits don't cost as much as you might think. A split-limit policy of 100/300/50 costs slightly more than a 20/40/10 policy, even though the coverage is five times as much.
• There is no grace period for paying your premium on an auto insurance policy. Be sure your premium payments are postmarked before the date they're due.
• The insurer is not required by law to notify you of your renewal date. Although many insurance companies do remind their customers, you're responsible for marking the renewal date on your calendar and paying before the renewal date.
• If you have many assets, think about getting an umbrella liability policy for all your property. This policy extends the liability limits of your current liability policies.
• Don't assume you can save money by not reporting a new car or a second car on your current policy. You may be able to get automatic coverage for a limited time if you trade cars or buy a second one. Remember, only the limits in your current policy apply. So, when you change cars or add a car, contact your insurance company immediately and adjust your policy coverage as needed.
• Consider dropping collision coverage when your car's value becomes to low to be worth the premium payments. In other words, drop collision when you can afford to replace the car without putting a strain on your budget. For some people, this may be $500, while for others, it could be $2,500.
• Cut costs even more by reducing the number of miles you drive. Some companies give discounts to people who drive fewer than 7,500 miles per year.
• Think twice about accepting extra insurance coverage when you rent a car. You are often covered by your automobile policy for accidents in a rental car. However, it pays to be sure, so read your policy carefully.
• Ask your insurer about a discount if your car has automatic seatbelts and air bags.
• Some companies offer a lower rate to females aged 30 to 64 who are the only driver in a household.
• The decision to let someone who is not on your policy drive your car is important. Be aware that insurance follows the car, not the driver. Think seriously before lending your car to friends. You could be liable if your car is involved in an accident.
• Remember, a series of three claims can put your customer status with the insurance company in danger. At the least, your premium may be increased or similar action may be taken by the insurance company. Drive safely and defensively.