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Nine Ways to Lower Your Auto Insurance Costs

By the Insurance Information Institute
110 William Street
New York, NY 10038
(212) 669-9200

Reviewed and Approved by: United States Office of Consumer Affairs, Consumer Federation of America, National Consumers League, National Association of Consumer Agency Administrators

A Quick Look
 1. Comparison Shop
2. Ask For Higher Deductibles
3. Drop Collision Comprehensive Coverages On Older Cars
4. Eliminate Duplicate Medical Coverages
5. Buy A "Low Profile" Car
6. Consider Area Insurance Cost If You Are Making A Move
7. Take Advantage Of Low Mileage Discounts
8. Find Out About Automatic Seat Belt Or Air Bag Discounts
9. Inquire About Other Discounts

The Details

You may not realize it, but the insurance rates you pay for your car can vary dramatically depending on the insurance company, agent or broker you choose, the coverages you request and the kind of car you drive. Listed below are a number of things you can do right now to lower your insurance costs.

1. Comparison Shop

Prices for the same coverage can vary by hundreds of dollars, so it pays to shop around. Ask your friends, check the yellow pages or call your state insurance department (phone numbers are on back page). You can also check consumer guides, insurance agents or companies. This will give you an idea of price ranges and tell you which companies or agents have the lowest prices. But don't shop price alone.

The insurer you select should offer both fair prices and excellent service. Quality personal service may cost a bit more, but provides added conveniences, so talk to a number of insurers to get a feeling for the quality of their service. Ask them what they would do to lower your costs. Check the financial ratings of the companies too. Then, when you've narrowed the field to three insurers, get price quotes.

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2. Ask For Higher Deductibles

Deductibles represent the amount of money you pay before you make a claim. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision cost by 15% to 30%.

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3. Drop Collision And/Or Comprehensive Coverages On Older Cars

It may not be cost-effective to have collision or comprehensive coverages on cars worth less than $1000 because any claim you make would not substantially exceed annual cost and deductible amounts. Auto dealers and banks can tell you the worth of cars.

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4. Eliminate Duplicate Medical Coverages

If you have adequate health insurance, you may be paying for duplicate medical coverage in your auto policy. In some states, eliminating this coverage could lower your personal injury protection (PIP) cost by up to 40%.

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5. Buy A "Low Profile" Car

Before you buy a new or used car, check into insurance costs. Cars that are expensive to repair, or that are favorite targets for thieves, have much higher insurance costs. Write to the Insurance Institute for Highway Safety, 1005 North Glebe Road, Arlington, VA 22201 and ask for the Highway Loss Data Chart.

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6. Consider Area Insurance Cost If You Are Making A Move

Costs tend to be lowest in rural communities and highest in center cities where there is more traffic congestion.

The National Insurance Crime Bureau ranks more than 250 cities by auto theft rate.

Insurance News Network lists the average cost of insurance for all 50 states.

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7. Take Advantage Of Low Mileage Discounts

Some companies offer discounts to motorists who drive fewer than a predetermined number of miles a year.

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8. Find Out About Automatic Seat Belt Or Air Bag Discounts

You may be able to take advantage of discounts on some coverages if you have automatic seat belts and/or air bags.

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9. Inquire About Other Discounts

Some insurers offer discounts for more than one car, no accidents in three years, drivers over 50 years of age, driver training courses, anti-theft devices, anti-lock brakes and good grades for students. See the following page for a guide to these and other discounts.

    Inquire About Discounts For:
  • $500 deductible
  • $1,000 deductible
  • More than 1 car
  • No Accidents in 3 Years
  • No Moving Violations in 3 Years
  • Drivers Over 50 Years of Age
  • Driver Training Course
  • Anti-Theft Device
  • Low Annual Mileage
  • Automatic Seat Belt
  • Air Bag
  • Anti-Lock Brakes
  • Good Grades for Students
  • Auto and Homeowners Coverage with the Same Company
  • College Students Away From Home Without a Car

    You can reach your state insurance department at:
    Alabama205-269-3550 Mississippi601-359-3569
    Alaska907-465-2515 Nebraska402-471-2201
    American Samoa684-633-4116 Nevada800-992-0900
    Arizona602-255-5400 New Hampshire800-852-3416
    Arkansas501-686-2900 New Jersey609-292-5363
    California800-927-4357 New Mexico505-827-4500
    Colorado303-894-7499 New York212-602-0203
    Connecticut203-297-3800 North Carolina800-662-7777
    Delaware800-282-8611 North Dakota800-247-0560
    District of Columbia202-727-8002 Ohio800-686-1526
    Florida800-342-2762 Oklahoma405-521-2828
    Georgia404-656-2056 Oregon503-378-4271
    Guam671-477-5144 Pennsylvania717-787-5173
    Hawaii800-468-4644 Puerto Rico809-722-8686
    Idaho208-334-2250 Rhode Island401-277-2223
    Illinois217-782-4515 South Carolina803-737-6117
    Indiana800-622-4461 South Dakota605-773-3563
    Iowa515-281-5705 Tennessee800-342-4029
    Kansas800-432-2484 Texas512-463-6464
    Kentucky502-564-3630 Utah801-530-6400
    Louisiana504-342-5900 Vermont802-828-3301
    Maine207-582-8707 Virgin Islands809-774-2991
    Maryland800-492-6116 Virginia800-552-7945
    Massachusetts617-727-3357 Washington800-562-6900
    Michigan517-373-9273 West Virginia800-642-9004
    Minnesota800-652-9747 Wisconsin800-236-8517
    Missouri314-751-2640 Wyoming307-777-7401
    Montana800-332-6148

    For more information, call the National Insurance Consumer Helpline (NICH) at 1-800-942-4242.

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    Copies of this handbook and other consumer pamphlets are available upon request from Publications Services, Division of Support Services, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Or, you can visit the U.S. Consumer Information Center website.

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