Driving a hard bargain on car insurance

by Broderick Perkins

(9/13/2010) State Farm wasn't there and, with Allstate, well, maybe you aren't in the best of hands, according to consumers asked to rate auto insurance companies.

Consumer Reports found NJM Insurance Group (94), USAA Group (93), Amica Mutual Group (93) and Auto-Owners Insurance (92) at the top of the heap after it surveyed 28,241 auto policy holders who had filed auto insurance claims -- settled or rejected -- from January 2006 to June of 2009.

A score of 100 meant readers were completely satisfied; 80, very satisfied, on average; 60, fairly well satisfied.

The doesn't mean State Farm (89) and Allstate (85) were rated poorly. They just didn't get the highest marks.

Most auto insurers are doing a good job and settling claims. The survey of Consumer Reports readers found that 86 percent of readers who filed claims were highly satisfied with how insurers handled their claim.

Even those at the bottom of the heap, Commerce Insurance (81), MetLife Auto & Home Group, Travelers and Progressive Group of Insurance Companies (all 84) and Farmers Insurance Group of Companies (84) were all found to be better than satisfying, according to the survey.

Complete results are in the October 2010 issue of Consumer Reports magazine and online for subscribers.

So how do you stay satisfied?

Consumer Reports advises:

• Check rates annually. Check rates from a variety of insurers each year to compare. More than 60 percent of those surveyed have been with the same carrier for 10 or more years and, as a result, couldn't find a better rate.

• Drive less. Miles driven per year is a major component considered for your premium. Lower mileage translates into lower premiums. Saves gas costs too. Let your insurer know if you've retired, changed jobs or otherwise reduced driving for a 5 to 10 percent reduction in your premiums.

• Drive the right car. Before buying a car, ask your car dealer to show you the "Relative Collision Insurance Cost Information Booklet," produced annually by (and available online from) the National Highway Traffic Safety Administration (NHTSA). The Highway Loss Data Institute, likewise, offers data on types of losses by vehicle model. Also, ask your insurer for quotes on different models.

• Up the deductible. Raise your deductible to as much as you can afford out of pocket to reduce your premium. Upping your deductible from $200 to $500 can cut your premium on collision by 15 to 30 percent. At $1,000 you could slash your premium by 40 percent.

• Parent your teen. Protect your child and cut your rates, by making him or her take a driving course before getting a license. Teens are less experienced and have a higher crash rate than adults. Also let your insurer know when your child is away at college or otherwise not driving the car.

The Insurance Information Institute offers still more money-saving ideas for car insurance.

• Drop coverage on older cars. If your car is worth less than 10 times the premium, purchasing the coverage may not be cost effective. Instead of paying premiums, save the money for car repairs, Auto dealers and banks can tell you the worth of cars. Or you can look it up online at Kelley's Blue Book.

• Use one insurer. Most auto insurers will give you a break if you buy two or more types of insurance or insure more than one vehicle. That doesn't mean not to shop around for the best break.

• Maintain good credit. Most insurers use credit information to price auto insurance policies. People who effectively manage their credit have fewer claims. Pay your bills on time, don't obtain more credit than you need, keep your credit balances as low as possible and, only with the truly-free AnnualCreditReport.com, check your credit regularly to address errors and other problems.

• Consider group insurance. Buying in bulk, a group plan, say through your employer, business or alumni association, union or other large group, can come with reduced auto insurance premiums.