Take Advantage of Ways to Save on Auto Insurance

Dear Action Line: The TV ads for auto insurance companies say they can save us a bundle on car insurance. Can they really? -- L.R., Tulsa.

There are proven ways to save money on auto insurance, the Insurance Information Institute said in an e-mail. Dropping necessary coverage should not be one of them.

Shop around: Get at least three price quotes. Call companies directly or access their Web sites. The Oklahoma Insurance Department has an online guide, "Choosing your automobile insurance policy" at tulsaworld.com/ChoosingAuto. This includes a "rate table" for 19 major insurance companies serving Tulsa -- from Allstate to USAA Casualty -- in five categories: "16-year-old driver, no accidents or moving violations in past three years" to "70-year-old driver, no accidents or tickets in past three years."

Higher deductible: Your deductible represents the amount of money you pay before your insurance policy kicks in when you have a claim. By requesting higher deductibles, you can lower your premium. Raising your deductible from $250 to $500 reduces the cost of collision and comprehensive coverage up to 30 percent. Raising it to $1,000 saves 40 percent.

Check insurance before buying a car: Premiums are partly based on vehicle sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft: air bags, anti-lock brakes, daytime running lights and anti-theft devices. Favorite theft targets cost more to insure. Information to help you select the car to buy is available from the Insurance Institute for Highway Safety at tulsaworld.com/InsuranceRisks.

Reduce old car coverage: Drop collision and comprehensive coverage on older cars. It might not be cost-effective to insure cars worth less than 10 times the amount you would pay for coverage. It makes no sense to pay comprehensive or collision on a car worth less than $1,000, as claim payments would not substantially exceed your premiums minus your deductible. Banks and credit unions can tell you the worth of a car by its age, or you can look it up online on the Kelley Blue Book at tulsaworld.com/BlueBook.

Cover home and auto with same insurer: Most insurers give discounts to customers buying two or more types of insurance from them. Reductions also apply to customers insuring more than one vehicle with the company. Insurers also reduce premiums for longtime customers with good claim histories.

High FICO score: A good credit score lowers premium costs and vehicle financing fees. Using credit ratings makes insurance rates more accurate, fair and objective. Drivers with long, stable credit records have fewer accidents than drivers who don't.

Discounts: Insurers offer discounts to accident-free policy holders with no moving violations, for driving fewer miles than the national average, for taking defensive driving courses and to young people with good grades.

Submit Action Line questions by calling 699-8888 or by e-mailing phil.mulkins@TulsaWorld.com or by mailing it to Tulsa World Action Line, P.O. Box 1770, Tulsa OK 74102-1770.

Originally published by PHIL MULKINS World Action Line Editor.

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