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03.07

Pros & Cons of Auto Insurance

Provided by IEEE Financial Advantage

How Much Do You Pay For Auto Insurance?

The good news is you may pay less for auto insurance this year. According to the Insurance Information Institute (I.I.I.), the average annual cost for auto insurance premiums nationwide for 2007 is estimated to decrease – the first decrease in over eight years.

Although auto insurance premiums are expected to decrease, you can pay a whole lot more or a whole lot less for the same coverage depending on the company. To get the most out of your insurance dollars, it pays to shop. But where do you begin?

Start with highly-rated insurance companies

It’s a good idea to shop with insurance carriers that have high ratings from credit-rating agencies, like Standard & Poor’s and A.M. Best. You want to be sure that the company you choose will be able to pay claims.

Take advantage of available discounts

While many companies offer discounts for insuring two or more cars, safe drivers and safety features, some offer “double discounts” for insuring both your car and home with the same company. Request quotes on both your auto and home to get maximum savings.

And don’t forget to ask if the company offers a discount for organization affiliation. You may be able to get extra savings for your IEEE affiliation or other organizations, like alumni associations, credit union and club memberships, or credit cards.

Inquire about policy service charges. Most likely, you’re paying a service charge if you’re on a direct bill payment plan with your insurance company. You may be able to save a few more bucks by choosing to have your premiums automatically deducted from your banking account. Plus, you won’t have to worry about missing a payment or writing a check.

Assess your coverage needs

All states require you to carry minimum liability limits. With today’s abundant amount of lawsuits and ever-increasing medical costs, the minimum may not be enough. A good rule of thumb is to choose higher liability limits and offset the additional cost by raising your comprehensive and collision deductibles. Typically, increasing your deductible from $250 to $500 or $1000 can lower the premium between 15 and 20 percent. If you have an older car, say 10-years- old, it might be in your best interest to drop collision coverage altogether. Talk to your insurance counselor about the coverage options that work best for you.

If you do the homework, you could save hundreds of dollar a year on your auto insurance. Better yet, you could get more protection for less than you’re currently paying. Find out how much you could be paying for auto insurance and put “get auto insurance quotes” on your next shopping list.

These tips are brought to you by Travelers, a proud partner of IEEE since 1997, and IEEE to ensure your auto insurance is in step with your life. Learn more and find out how to get your auto insurance in-synch with your needs at special group rates by calling 1-800-842-0629 or visiting www.travelers.com/ieee.

Comments may be submitted to todaysengineer@ieee.org.