CAR INSURANCE BUYING GUIDE
Those quirky characters in auto-insurance TV ads might give you more laughs than actual savings, according to a 2009 survey by the Consumer Reports National Research Center. Only 14 percent of 4,500 ConsumerReports.org subscribers who compared premiums found that they would save money by switching insurers.
That doesn't mean shopping is a waste of time. But it's only one way to save on auto premiums, which these days are buffeted by a slew of variables, such as:
Auto-insurance premiums are up 10 percent since 2008, compared with zero for overall inflation. That's a big change from the three prior years, when rates rose 1 percent per year on average.
Credit-based insurance scores
Hard times have hurt many consumers' credit scores. That could result in rate increases, thanks to most carriers' use of credit-based insurance scores in setting premiums. Consumer advocates (including Consumer Reports) have long argued that credit-based scoring is unfair because scores are not related to accident risk. But legislative efforts in 27 states to ban or restrict the practice over the last two years have been unsuccessful.
The recession has prompted unemployed consumers to go without insurance, which could shift some or all of their liability costs to you.
Some insurers use consulting firms that mine databases for personal policyholder information that may or may not be accurate. One company claims to dig for information about your kids, your marital status, your job, and other data with which to confront you for a possible rate hike.
Some insurers push policyholders to get their cars fixed at specified repair shops, which left our readers less satisfied, so that the companies can cut costs, often through use of cheaper aftermarket replacement parts.
Some cost factors are beyond your control, but there's still plenty you can do to cut your premiums for the auto coverage you need.
more from Consumer Reports car insurance buying guide.
Beware of hidden cost factors
Are low-cost replacement bumpers safe?
A number of auto insurers have recommended or required use of aftermarket crash parts, which are often produced in overseas factories and can be significantly cheaper than the parts from original equipment manufacturers. Unfortunately, the parts might also be cheaper in quality.
Some safety experts are concerned about the internal bumper parts: a bumper beam, bumper isolators, foam, crush cans, brackets, and radiator supports. In a frontal crash, those pieces work together to properly transmit the crash pulse, or vibrations from impact energy that moves through the vehicle, to air-bag sensors and away from the passenger compartment to reduce or prevent injury.
"There's a lot of engineering that goes into making a crash-protection system," says David Zuby, chief research officer for the Insurance Institute for Highway Safety. "You can't willy-nilly change those parts because the system may not work the way it was designed."
In July, Ford reported that its engineers had found alarming differences in two aftermarket parts tested. One bumper bar was made of mild steel, instead of the ultra-high-strength steel that the original Ford part uses. A radiator support was made of plastic instead of the magnesium used in the Ford part. In computer-simulated crash tests, the fakes changed the timing of the crash pulse, which might affect air-bag deployment.
"Differences in material could result in a difference in the timing of the air-bag deployment," says Mike Warwood, Ford's parts marketing and remanufacturing manager. "The air bag might deploy earlier than it should or later than it should. Or it might deploy when it shouldn't or not deploy at all when it should."
Ford's testing follows a demonstration last year by Toby Chess, a master collision-repair instructor, who used a reciprocating saw to easily slice through an aftermarket bumper bar. The saw couldn't cut through the original automaker bumper bar.
Some insurers have suspended use of the bumpers in repairs. In February, the Certified Automotive Parts Association, which certifies the quality of some aftermarket replacement parts (but not bumpers), tested a sample of aftermarket bumpers. It found "serious deficiencies" in metal hardness, material thickness, and fit.
Don't let your insurance company pressure you into using aftermarket collision-repair body parts, especially safety-related ones. If your car has already been repaired, check your invoices or ask your insurer to see whether aftermarket parts were used. If knockoffs were used, demand that they be replaced with original equipment.
Control insurer cost factors
Do an annual rate check
Check rates from other insurers annually to make sure you're getting the best deal. But if you've been with the same insurer a long time, it might be tough to beat its rates. That's one reason shopping around didn't pay off for our survey respondents: More than 60 percent have been with the same carrier for 10 or more years. "Insurers reward longevity, particularly loss-free longevity," says Bill Wilson, associate vice president for education and research at the Independent Insurance Agents and Brokers of America. Long-term policyholders get bumped up into better rate tiers.
But most consumers, 75 percent, haven't shopped for auto insurance in the past year, and of those who did, most researched only one or two companies, according to a recent insurance-industry survey. By looking father afield, you'll have a better shot at savings.
For example, a San Diego multicar couple in their 40s with a 17-year-old male driver on their policy and no violations or accidents might jump at Progressive's $6,104 annual premium if they were already paying $8,593 to Farmers Mid-Century. But they'd find even lower rates at State Farm ($4,625), Safeco ($3,717), Geico ($3,648), and USAA ($2,883), according to rate comparisons published by the California Department of Insurance.
Check whether your state insurance department provides rate comparisons; go to www.naic.org/state_web_map.htm to find a link to your state's agency. You can also compare multiple insurers online at Answer Financial, Insure.com, InsWeb, and NetQuote. You usually won't get an immediate quote online, but you will get e-mail messages from hungry agents.
Consider forming a relationship with an independent agent, who will check rates for you at a range of carriers.
Pick a top-rated insurer
Saving is not only a matter of finding the lowest premium. An insurer can charge less in premiums but cost you more overall by lowballing loss estimates, hassling the repair shop to cut corners, and forcing you to pay extra for the manufacturer's replacement parts if you choose them over cheaper knockoffs. It can also unfairly jack up your premiums after an accident.
To get the best service when you need it most, consult our Ratings, which are based on the experiences of 28,241 ConsumerReports.org subscribers who filed a claim between 2006 and the first half of 2009. Eighty-six percent of them were highly satisfied with the handling of their claims. Among the highest-rated groups were NJM, USAA, Amica, and Auto-Owners, with overall satisfaction scores of 92 or higher. Availability for some insurers is limited by region or policyholder eligibility rules.
All rated companies did well, but some did better than others. Only 10 percent of Auto-Owners policyholders complained about claims-related problems, such as delays and disputes over fault or damages. By contrast, 26 percent of Commerce customers had a complaint in that area.
Set the deductible right
A higher deductible reduces your premium because you pay more out of pocket if you have a claim. Hiking your deductible from $200 to $500 can cut your premium on collision by 15 to 30 percent. Go to $1,000 and you could save 40 percent. If you have a good driving record and haven't had an at-fault accident in years, if ever, opting for a higher deductible on collision might be a good bet. Just make sure you can afford to pay it if your luck runs out.
Review all of your coverage
Your liability coverage pays for bodily injury and property damage that you cause in accidents. Don't get caught short by reducing your liability limits to the state minimums. Buying more coverage might seem like an odd way to save, but the benefit comes if you have a costly claim, which can put your personal assets at risk. Buy standard 100/300/100 coverage, which pays for bodily injury up to $100,000 per person and $300,000 per accident, and property damage up to $100,000. If you have a high net worth, boost bodily injury to $250,000 per person and $500,000 per accident.
One of every six drivers today may be uninsured, according to the Insurance Research Council. If you get hit by an uninsured at-fault driver, you'll have to pay for repairs out of your own pocket and sue the at-fault driver for damages. Protect yourself by buying uninsured/underinsured motorist protection with the same limits as your liability coverage.
You can probably cancel your collision and/or comprehensive coverage when the annual cost equals or exceeds 10 percent of your car's book value. Otherwise, you could end up paying more over time than you would recoup for repair or replacement of your damaged, stolen, or totaled vehicle.
If you have another car that you can use while your vehicle is being repaired, you don't need to pay for rental-reimbursement coverage. Dump roadside assistance if you have an auto-club membership that's a better deal. Think carefully about personal-injury protection and medical-payments coverage: Forget it if you have good health coverage; keep it if you don't or if your usual passengers might not be well insured.
Watch crash repairs closely
Claims payment is where the rubber hits the road. Your insurer might push you to use shops in a direct-repair program (DRP) or use cheaper replacement parts, rather than the original equipment manufacturer (OEM) parts. Tests have found that some non-OEM parts fit poorly, are more prone to rust and corrosion, don't always meet federal safety standards, and may not provide good protection in a crash.
In our survey, respondents' satisfaction with repairs was significantly lower among those who felt pressured to use DRP shops and non-OEM parts. And respondents who said they were pressured to use non-OEM parts had significantly more problems with their repairs.
Take advantage of discounts
Discounts are designed to attract the business of lower-risk drivers. Those drivers include students with good grades, new drivers who have taken a driver-training course, older drivers who have taken a refresher course, and members of affinity groups, such as college alumni and certain occupations and professions. Antitheft and safety equipment can also get you a discount.
Insurers also offer discounts if you buy your homeowners, renters, or life-insurance policy from them. But be sure you check out total costs both ways: premiums from different insurers combined compared with single-insurer packages.
At least two insurers offer discounts in some states based on electronic monitoring of your driving habits. With Progressive's "Snapshot" discount, eligible drivers in 22 states plug an electronic data recorder into their car's data port (available only for cars from model year 1996 or later). The device tracks miles and time of day the car is driven and how often you brake suddenly. If the device shows that you drive less than average, avoid operation from midnight to 4 a.m., and don't stomp on the brake pedal, you might get up to a 30 percent discount. If it shows that you're a riskier driver, you could see your rate go up by as much as 9 percent in some states. If you quit the program, Progressive won't use the data to set your premium, except in Alabama, where the insurer can use it for a year after you quit.
State Farm's "Drive Safe & Save" discount, available only in Ohio, uses your GM vehicle's OnStar system to track and transmit monthly odometer readings. A 30- to 49-year-old driver who pays $600 per year in premiums, for example, will get a 9 percent discount if he drives 13,000 miles per year and a 23 percent reduction if he drives only 6,000 miles. But if he's rated as "short annual mileage," less than 7,500 miles per year, he could end up paying more if the data show that he drives more.
If you need any help changing or deciding which insurance company to insure you, contact Collision Pro, we may be able to help you with your decision by recommending an insurance company that can meet your needs!
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We hope it doesn’t come to it but if you cannot resolve a problem with an insurance company and need to file a complaint with the insurance commissioner’s office of The State Of Montana please click the link below or call 1-800-332-6148
Keep in mind that your Montana rights are for your protection, and makes it possible for you to get your full loss reimbursed to you by the insurance company that you are working with. Yes we do want to repair your car for you. Yes make sure you get what you are entitled to, “it’s your loss”! It is why you have been protecting your investment and why you pay your hard earned money for your insurance premiums!
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Editor's note: Antisteering laws limit an insurer's or other institution's ability to recommend or direct you to a specific repair facility. Steering is regarded as restraint of trade and business interference.
An insurance company, including its producers and adjusters, that issues or renews a policy of insurance in this state covering, in whole or in part, a motor vehicle may not:
(a) require that a person insured under the policy use a particular automobile repair business or location; or
(b) engage in any act or practice that intimidates, coerces, or threatens an insured person or provides an incentive or inducement for an insured person to use a particular automobile repair business or location.
Common Types of Insurance Fraud
Fake Insurance Companies: Fake insurance companies defraud consumers by selling bogus policies with no intention of paying claims. Often, fake insurance companies draw in consumers with products that cost significantly less than those offered by competitors.
Agent and Broker Fraud: Agents and brokers who aren't properly licensed with the state may deceive customers for personal gain. If you do not receive an insurance ID card or a copy of your policy in a timely manner, this could be a sign your agent or broker is scamming you.
Consumer Insurance Fraud: The National Insurance Crime Bureau estimates that ten percent of all insurance claims filed are fraudulent, adding $200 to $300 a year in higher insurance premiums for the average household. Reporting suspected insurance fraud can help keep everyone's premiums from rising.