When you consult with Loring & Company, we will help you to make all the right auto insurance decisions. We are independent agents representing several insurance companies. Most importantly, at the time of a claim, we represent your interests, not those of the insurance company.
Tip #1 – PURCHASE COLLISION & OTHER THAN COLLISION COVERAGE:
Older cars may not be worth as much as you might think, so review their value before you decide to buy these coverages. It is usually not wise to spend 10% or more of the vehicle’s value on these coverages.
For example, if a 1991 Ford Taurus has a current retail value (N.A.D.A. April, 1999) of $3,475 in good condition and acceptable mileage, the trade-in value for this car is only $2,225. Keep in mind that these numbers are always overstated.
In any accident, there is a 50% chance that the other driver is at fault. If the other driver is insured, you can collect your damages from his/her liability insurance.
Factor in your deductible. Reduce the value of the car to reflect the amount of your deductible. Regarding the Taurus above, the most you would be able to collect with a $500 deductible is $2,975. Most accidents are not total losses. The majority of claims are small “fender benders” that average $300-$500 in damages. Add in your deductible and you can see that your annual premium is only giving you a $400 to $1,000 benefit. Is this worth $300-$500 in premiums?
Rather than paying collision and other than collision premiums to the insurance companies, put the same amount of money into your savings account. How much will you have saved in two, three, or four years? At $300 per year, you save $1,200 over four years. This money could be used to make repairs, in the event of an uninsured accident, or be applied towards the down payment of your next car.
Everyone is aware of how accidents affect their future insurance premiums. By self-insuring these coverages, you eliminate the possibility of a claim on your record.
You can usually negotiate a lower repair cost from a body shop without insurance than with it. Body shops always charge insurance claims at their highest rate and are willing to work with you when no insurance is available.
Tip #2 – CHOOSE THE RIGHT DEDUCTIBLE:
In most cases, a $500 deductible for both collision and other than collision coverage is your best value. All banks and leasing companies will accept this deductible. In certain circumstances, you may want to increase this to $1,000.
$1,000 deductibles are appropriate for:
very high value vehicles
young drivers with newer vehicles
families with four or more vehicles
drivers with poor records
situations when this deductible is not a financial burden
Tip #3 – PURCHASE AUTOMOBILES THAT HAVE A GOOD INSURANCE RATING:
All cars are different. Insurance rates reflect the damageability, repairability, safety, theft rates, and various factors. Before you make the purchase, it is a good practice to call your agent and obtain the rating symbol of any car you are considering buying. This could save you hundreds of dollars per year and thousands over the life of the vehicle.
Tip #4 – ASK QUESTIONS ABOUT AVAILABLE DISCOUNTS:
Ask about air bags, anti-lock brakes, anti-theft systems, multi-car, good driver, Good Student, Driver’s Education, etc. Some companies offer mature drivers, non-smoking and other discounts. The multi-car discount is 25% on each vehicle. Insurance computers are designed to catch most of these, but you should ask to be sure.
Tip #5 – INQUIRE ABOUT HOW TO INSURE NEW DRIVERS:
Most insurance companies assign these drivers as occasional drivers to the highest rated family automobile. Look for a company that will allow you to assign the driver to the actual vehicle driven.
Good Student and Driver’s Education are very important discounts.
When purchasing a vehicle for a new driver, look for a safe and inexpensive vehicle so that you can avoid the collision and other than collision coverage.
In addition, look for cars with four doors, 4 cylinders, and 2-wheel drive.
Place restrictions on new drivers regarding passengers, territory, seatbelts, curfews, drinking, etc.
Remind them that any tickets or accidents will immediately double or triple their insurance costs and can affect the entire family. Police are more likely to ticket a young driver for a minor violation than older drivers.
Tip #6 – DO NOT REPORT SMALL CLAIMS:
It is always better to handle small claims yourself. That is why you have a $500 deductible. Do not submit the $600, $700, or any other small claims. After your deductible, you will only collect a few hundred dollars and repay that and more with future premium payments. Call your agent to discuss all claims. Your agent can explain how best to handle small claims. All accidents, claims, and tickets are reported to a national database. What may seem small and insignificant now, can end up haunting you for years to come.
Tip #7 – JOIN A MOTOR CLUB FOR TOWING & EMERGENCY ROADSIDE SERVICE:
The cost to join AAA, Amoco, and others is approximately $20-$25 more per year than purchasing these coverages from your insurance company. However, every time you use your insurance company, it counts as a claim. When you use a motor club, nothing is reported to the national database. In addition, motor clubs have much greater benefits than the towing and road services provided by your insurance company.
Tip #8 – PURCHASE A 1-YEAR AUTO POLICY:
Most companies sell 6-month policies because these shorter term policies allow the company to check your driving and claim record more often. Furthermore, they can pass on rate increases to you more quickly and cancel or non-renew sooner if you no longer qualify for their policy. Look for companies that sell 1-year policies. In doing so you will lock in your premium for one full year.
Tip #9 – PACKAGE YOUR AUTO INSURANCE WITH YOUR HOMEOWNERS:
Your best value is to buy your auto insurance and homeowner’s insurance from the same company and agent. This maximizes your premium discounts and coordinates your deductibles. Claims that may involve both policies can be handled more quickly without any hassles.