Do I have any control over my auto insurance premiums?
January 7th, 2013 by admin
The New Jersey automobile insurance marketplace continues to be in a constant state of change. Each passing administration made changes to the insurance regulatory system in hopes of stabilizing premium costs. These changes included introducing tort thresholds; promoting fraud reduction; increasing rate factors for “bad” drivers; and legislating outright rate rollbacks. The conditions of the insurance market have made acquiring car insurance extremely diﬃ cult for some motorists. And, of those that do have insurance, many feel there is little they can do to decrease their premiums. However, there are a few precautions that can be taken to allow people to receive the lowest rates possible and avoid rising cots.
An operator’s driving history, including accidents and violations, aﬀ ects rates and could predict future claims activity. Obeying the rules of the road and driving defensively are your best ways to lower rates and keep them low.
Type of vehicle
A major factor in the rating of your physical damage insurance (i.e., other-than-collision and collision insurance) is the type of vehicle you own. In assigning a rate, most insurance companies begin with the cost of the vehicle and the model year. Generally, the higher the cost of the vehicle and the newer it is, the higher the rate. However, further adjustments are made for the vehicle’s weight, body type, engine performance, actual loss experience from past years for that model, etc. We can give you a rating comparison for vehicles you are considering purchasing or leasing, which will give you some control over the cost of your insurance.
Some people prefer to assume more of the risk of loss on their autos and save on premiums. It may make sense for you to remove other-than-collision and collision coverages (also known as physical damage) on older vehicles or increase your deductibles on newer vehicles. A common rule of thumb is that for vehicles more than 10 years old, many do not cover them for other-thancollision (comprehensive) or collision coverage. However, to obtain glass coverage on a vehicle, you would have to maintain other-than-collision coverage.
Use and residence
Your employment opportunities and lifestyle most likely will dictate the kind of use your vehicles get and the location where they are garaged—two things that impact your premiums. However, there is a way you can gain some control over the rating of your vehicles. You may want to consider driving the lowest-rated vehicle (e.g., an older vehicle without physical damage coverage) for activities that have the highest rate for use (e.g., business use or long-distance commuting to work).
Timely premium payment
Always pay your premiums on time. Issuing cancellations, processing late payments, and then issuing reinstatements, add signiﬁ cant costs to the servicing of auto insurance policies. Some companies use nonpayment cancellations as eligibility requirements for new policies.
Many insurance companies have established a link between a person’s credit history and that person’s probability of having a car accident. As strange as this may sound, there appears to be an objective basis for using credit analysis, known as insurance credit scores, to predict which policyholders will have greater-thanaverage loss experience or less-than-average loss experience. Managing your credit and your credit report will help to lower rates on your auto insurance.
Tere are some standard discounts, such as those for taking a driver-training course or a defensive-driving course, qualifying as a good student, insuring multiple vehicles on the same policy, installing certain anti-theft devices and maintaining certain safety equipment (e.g., passive restraints or anti-lock brakes). Some insurance companies have developed their own discounts for such things as buying your homeowners policy from the same company. Our agency would like you to take advantage of every discount that is available to you, so don’t hesitate to call us for a discount review.
The main types of fraud are staged accidents and phony or exaggerated medical bills. If you are concerned about your auto insurance costs, be sure to contact state legislators and urge them to support reforms to drive the cost of fraud out of the state’s auto insurance system.