4 Tips to Lower Your Auto Insurance Bill

4 Tips to Lower Your Auto Insurance Bill

If you want to dance, you gotta pay the disco; and the cover charge for driving is car insurance: you gotta have it (and play whatever music you want). The List's Jimmy Rhoades has some tips for making sure you don't pay too much for the auto insurance you have to have onWhat's The Deal.

Here are some tips for making sure you don't pay too much for the auto insurance you have to have.

Shop Around

I spoke with Nick Musica the Director of Content at DMV.org – which, to be clear, is NOT the regular DMV, it's a privately owned online resource for auto-related information and services.  "It's really in everyone's best interest to shop for car insurance maybe every six months, and when you do shop for car insurance, get at least three quotes, because every car insurance company rates differently."

Okay, let's unpack that last bit of information: What does Nick mean when he says companies "rate differently"? "All the companies have rating engines. For example, a company collecting data on education, they may not use that as a rating factor, until they find one day that statistically it means something."

So if you've ever wondered why the online forms ask you questions that seem to have nothing to do with driving, just remember: it's all about data sets and correlation. One company might correlate advanced degrees with lower risk, and give you a discount for having a master's degree. But others won't.

But EVERY company is taking all that seemingly irrelevant information – about your education, your job, your credit rating – and comparing it against data sets regarding accidents, points, and payouts. As soon as there's a strong enough correlation between, say, education and accidents – bam! – that information will trigger a rate adjustment.

It's not personal. It's business.

So the reason you shop around for three quotes at least once a year is that seemingly unrelated life events – like getting a degree, or improving your credit score – might lower your rates.

Park Smart

Street parking's always a bad idea, because it increases the risk of damage or theft. For some companies, driveway parking results in the lowest rates, because people bump into things going in and out of  their garages and file more claims to fix the scratches and dents. And if there's a break-in to your home, thieves have access to your locked, attached garage, where they can chop your car into parts in complete privacy.

Again, where you park won't affect every policy. Some policies won't even ask. But the ones that do are making a correlation between where you park and the data sets of all their past payouts for claims.

It's not personal. It's business.

Avoid The Points

As Nick from DMV.org says, "You go too fast and you accumulate a bucket of speeding tickets, your rates are going to go up." Obvious, right?

That said, if you think you have a case, fight the ticket! There's even an app for that.

Off the Record for iPhone connects you with a vetted lawyer who will fight your traffic ticket for a flat fee of $250, which is refunded if he or she doesn't win. If you do win, they'll keep the $250, but you'll make that money back by avoiding points on your record that will jack up your premiums.

Look, it's not personal, it's business. Insurance companies are looking at you as a number, so make them win your business with a good number on your bottom line.

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