Sunday, November 6, 2011

The Rising Cost of Auto Insurance

It seems like every time I turn on the television, I am bombarded with insurance commercials. I see Flow offering discounts for Progressive, a gecko advertising for Geico, Mayhem causing trouble -advertising for All State Insurance and countless others. Most of the insurance companies are advertising their low rates; others make their distinction on service.

Rates seem to continue to increase and it may not be my imagination. In the November 2011 issue if Smart Money, they state that auto insurance has increased 10% from 2008-2010, siting increases are due to the increased costs to repair a vehicle, soaring medical bills, increased probability of being in an accident, and increased number of uninsured motorist (now estimated at 16%).

So what is a person to do, to make sure they are covered with the correct amount of coverage and still keep their costs low? Here are some suggestions:

• Keep an eye on your credit score. Most insurance companies use your credit score to help estimate your risk and therefore your rate. By keeping your credit score high, you can keep your insurance rates low.

• Have the correct amount of coverage. Your state has a minimum coverage you must have. If you don't have enough insurance you could be putting other assets at risk if you get sued. By having too much insurance, you could be wasting your money.

• Shop around for different rates. It takes a little time, but may pay big dividends in savings to switch companies.

• Look at the deductible on your insurance. The higher your deductible, the more money you will have to pay out if you are in an accident, and the less the insurance company has to pay out.

• You could also give up some of your privacy and have your driving habits monitored. Progressive Insurance has "Snapshot" which monitors your driving habits. Your premium will be set on how you drive.

We all need to have insurance and the correct amount of insurance. Shop around on-line and/or talk to your insurance agent to make sure you are covered.


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