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How to Cut Your Auto Insurance Costs

JEFFERSON CITY _ If insuring your car is eating up your budget, you're not alone. According to Randy McConnell, a spokesman with the Missouri Insurance Department, Missourians pay an average of $517 per year for their auto insurance.

While maintaining a good driving record is the most obvious way to decrease insurance costs, review your policy with the following money-saving, tips in mind. The Missouri Insurance Department put its stamp of approval on each of these suggestions.

• Buy a low risk car - Pick a car with a low insurance-cost rating. All cars are assigned a rating based on safety, theft susceptibility, repair costs and loss history. Kiplinger's car guide gives information on specific car models or consult your agent.

• Increase your deductible - Choose a deductible that makes sense. If you'd pay the costs out-of-pocket rather than risk an increase in your premiums for a $250 claim, then you may be paying for coverage you're not going to use. By raising the deductible from $250 to $500, you can save 10 percent on your total premium. If you raise the deductible from $250 to $1,000, you can save 20 percent or more.

• Drop collision coverage for older cars - Collision coverage pays for accident repair costs. If premiums exceed 10 percent of the value of your car, it makes sense to drop collision coverage. Libraries have reference materials such as the NADA Used Car Guide that can help determine your car's value.

  Michael B. Jones, an agent with Shelter Insurance in Columbia, suggests signing up for Uninsured Motorist Property Damage (UMPD) coverage when dropping collision coverage for older cars. This investment, approximately $8 per year, will cover the cost of vehicle repairs if hit by an uninsured motorist.

  According to McConnell, seven percent of Missouri drivers do not have auto insurance.

  "Consumers should know that uninsured motorist insurance only covers medical treatment," he said.

  UMPD, where offered, can fill this gap.

• Reduce or drop medical payment coverage - If you have adequate health insurance, medical payment coverage is likely redundant. The liability portion of the policy pays the medical expenses of others who may be injured.

  But McConnell said that if passengers in your own car are hurt and they do not have an adequate health insurance policy, medical payment coverage is beneficial.

• Drop towing and rental car options - Emergency road service and rental car expenses quickly add up if you are insuring more than one car. Joining an auto club may save money and provide additional benefits.

• Clean up your credit rating - Even with a perfect driving record, rates could double or even triple if you have bad credit. Work on improving your credit report before applying for a new insurance policy.

  "Credit bureau reports are becoming more and more important," Jones said. "Insurance companies have found bad credit runs hand in hand with bad claims."

  McConnell questions this company practice.

  "Just because someone was late with a utility bill six months ago, doesn't mean that person is more likely to make a fraudulent claim," he said.

• Comparison shop insurance companies - Calling for premium information only takes a matter of minutes. Be sure to have a listing of your current coverage in order to make an accurate comparison.

  Check with the Missouri Insurance Department which publishes an annual auto buying guide which compares insurance costs for various companies. The department also puts out a guide to buying auto insurance. To request either guide, call the department's consumer affairs hotline at 1-800-726-7390.

• Ask for discounts - Take advantage of all discounts for which you are eligible. Check to see whether the following discounts are available through your agency:

  • Being a safe driver

  • Insuring multiple cars with the same company

  • Insuring homeowners or rental policies with the same company

  • Taking a safety driving course

  • Being an older driver

  • Being married

  • Owning a car with automatic seat belts, anti-lock brakes and air bags

  • Using anti-theft devices

  • Having a student driver with good grades

  • Car pooling

  • Parking in a garage

  • Driving a short distance to work

  • Always wearing your seat belt

  • Being a government employee

While reducing car insurance costs is advantageous, remember the reason for insurance. The state Insurance Department urges that you be sure you have the protective coverage needed in an emergency.

• Don't skimp on liability coverage - Liability coverage pays for medical expenses, property damage and legal fees for anyone hurt in an accident caused by you. Missouri requires every driver carry at least "25/50/10." That means $25,000 per person, $50,000 per accident and $10,000 for property damage.

  However, McConnell said this coverage is probably inadequate in the event of a serious accident with injuries today. According to Jones, the standard quote is now 100/300/50, a more realistic amount.

• Keep comprehensive coverage - Comprehensive coverage pays for damage to your car from things other than an accident _ like storms, theft or fire. This extra security is worth the premium, McConnell said.