Car Insurance - How Can You Lower Your Premiums?

2008-03-22T00:00:00.000-07:00

Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.

Consolidating policies

By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a ‘bulk buy’ discount.

Location

A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.

Excess

By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.

Your Vehicle

The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance – you may be able to buy the car but can you afford to run it?

Mileage

You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!

Parking

Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.

Security

Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.

No Claims Discount

Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.

Advanced driving skills

By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums. Two key variables NOT within the policyholder's control.

Your Sex.

Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.

Your Age

The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.

One final piece of advice.

A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.

Allstate must cut California auto insurance rates 15.9%

2008-03-21T23:26:00.000-07:00

Insurance Commissioner Steve Poizner orders Allstate to roll back prices more steeply than the company had wanted. The insurer is considering a legal challenge.
By Marc Lifsher, Los Angeles Times Staff Writer
March 19, 2008
Allstate Corp., which covers about 1 of every 10 insured cars in California, has been ordered to cut its automobile rates by 15.9% -- an average savings of $124 per car, state Insurance Commissioner Steve Poizner said Tuesday.

The new rate is effective April 14, and Allstate is considering whether to appeal the rate cut order in court.

"California's consumers deserve a competitive marketplace in which to shop around for the best rates that meet their needs," Poizner said in a statement.

"This reduction reaffirms my commitment to ensuring that excessive rates are not charged. At the same time, the rate reduction is fair and reasonable for the company."

Allstate's reduction is the latest in a series of rate cuts in California by dozens of automobile insurance companies since the summer of 2006. After losing a protracted court challenge, the industry began complying with regulators' insistence that it primarily base its premium-setting formulas on a person's driving record, number of years behind the wheel and total miles driven annually.

"It was very clear that they were charging too much," said Douglas Heller, executive director of the Foundation for Taxpayer & Consumer Rights, the Santa Monica-based advocacy group that successfully championed Proposition 103 in 1988. The voter-approved initiative turned insurance into a highly regulated business, similar to power companies and other public utilities.

Heller, whose organization had legal standing to participate in the Allstate case, predicted that other auto insurers would propose lowering their automobile premiums in rate submissions scheduled to be delivered to the California Department of Insurance this summer.

The order, which came at the close of a lengthy proceeding before an administrative law judge, was more than twice what the Northbrook, Ill., company wanted to grant its policyholders.

According to the order issued by Poizner on Friday, Allstate had requested permission to lower its rates by 7.1%. The department's rate-setting formula calculated that a 19.4% reduction was merited.

After months of legal arguments, a state administrative law judge granted Allstate a credit to cover the expenses of providing additional services to low-income neighborhoods and brought the final rate reduction down to 15.9%.

Allstate contends that it is being unfairly singled out by Poizner in being forced to cut rates by a larger percentage than other insurance companies.

"Suppressing one company's rates below the rest of the market is unfair to that company and not conducive to a healthy economy in California," Allstate spokesman Peter DeMarco said.

The company is also embroiled in a dispute with Poizner over the cost of its homeowner policies.

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Car Insurance - How Can You Lower Your Premiums?

Allstate must cut California auto insurance rates 15.9%