I am asked daily how to lower people's insurance premiums at my insurance agency. Some stuff is pretty intuitive, like driving record and driver age. These are a few of the answers I routinely volunteer that are a little less known:
Credit Score
That's right. Your credit score can and will be used against you in your car insurance rate. Insurance companies have a long and well established correlation between low credit scores and high loss experience. Say what? That means, statisticly, people with lower credit scores have had more claims than people with higher credit scores. There are some States that do not allow insurers to rate you based on your credit, but they use other means to determine your financial stability.
Homeownership
Homeownership is one of those other ways to determine financial stability. Many companies that offer both home and auto insurance say they are giving you a price break because you buy both through their company. The truth is, almost any car insurer will discount your policy if you are a homeowner. On average, homeowners are less likely to put in a claim for something small – this is the reasoning for the discount.
Prior Coverage
Keep that policy in force. This is one of the biggest discounts you can get in auto insurance. Simply having a policy in force for a year or more will greatly improve your rates and give you more choices of insurers. And don't forget: The higher your liability limits, the better. Insurers like that you're carrying insurance, but they really like it when your limits are higher than the State minimum. It shows judgment, maturity and consideration.
Loss History
Just because there was no police report or traffic citation, doesn't mean that fender bender didn't happen. Most insurance companies report claims to a database called CLUE. Your CLUE report is like your insurance credit score. When you file a claim, this information is recorded and may be used in the rating process for your next auto insurance policy. If you have a long history of insurance claims, many insurance companies may view you as a bad risk and rate you accordingly.
Tech Discounts
For the tech-savy consumer some insurers offer discounts for paperless billing. That paper and postage costs something, and they are willing to pass that savings on to you if you like getting your bills in your email inbox. Likewise, most insurance companies offer savings for automated monthly electronic drafts. If you sign up to have your monthly payment taken from your checking account, the insurer will cut you a break on the installment fees.
Big Brother
For those people who don't mind being "watched" by their insurer, they can qualify for a discount if they let the insurance company install a GPS enabled device. These devices vary in functionality, but most report location, speed, time on the road, rate of acceleration and deceleration. This is a discount that can backfire if you like to consistently drive 20 mph over the speed limit. These devices were initially used by parents to keep track of teen aged drivers.
Get Hitched
Yup. Insurance companies like married people. Just like your mother, they want you to grow up and settle down. Call your agent or company after you get married, and you'll see immediate savings on your auto insurance.
