Smart motorists rely on seat belts and air bags as the first line of protection in the event of a car accident. Another important safeguard--especially for financial security--is understanding and purchasing appropriate automobile insurance coverage.
While liability or no-fault insurance is mandated in most states, it is also a necessity for nearly all drivers to protect their assets in the event they cause a motor vehicle accident.
Understand The Basics
Several factors may affect auto insurance premiums. These include--but are not limited to--vehicle make and model, credit history, driving record, age, gender, marital status, annual mileage, mileage to work, coverage limits, claim history and geographic territory.
To help consumers understand their options, the National Association of Insurance Commissioners (NAIC), a voluntary organization of state insurance regulatory officials, has created a consumer Web site called Insure U (www.InsureUonline.org).
General Money-Saving Tips
Here are some tips that may save you money:
• Before buying or leasing a vehicle, remember that luxury cars, high-performance cars and convertibles are more expensive to insure than basic models.
• Shop around and compare rates from different insurance companies.
• Ask about discounts for cars equipped with safety features, such as anti-lock brakes.
• Some companies offer discounts to drivers who have three or more years without an accident or moving violation.
• Consider raising the deductible on your collision and/or comprehensive insurance.
• Maintain a good credit history, because a credit score can have a direct impact on auto premiums.
Make Adjustments Based on Your Life Stage Needs
It's important to review your auto policy each year to determine whether your insurance needs have changed--and update your coverage accordingly. For example:
• Consumers who are serving in the military and deployed abroad should consider lowering their liability coverage to the state-mandated minimum and dropping collision coverage altogether if their vehicle will not be driven for an extended amount of time.
• Young families, which are likely to be carpooling other people's children, should consider raising their liability coverage.
• Established families with teen drivers should ask if their insurer offers discounts for teens that pass a driver's safety course or maintain a B average or better in school.
• Seniors should consider taking a driver's refresher course, like those offered by the AARP or AAA, which may help them qualify for a discount.
By: Stacey Moore