Savings on auto insurance

By DAVID SCHEPP

dschepp@thejournalnews.com

THE JOURNAL NEWS

(Original publication: May 24, 2005)





With the cost of everything from gasoline to real-estate taxes to new appliances on the rise, many New Yorkers are cheering recent announcements by the state's auto insurers that they're cutting rates by as much as 6 percent.



Revisions to the Empire State's insurance code, crackdowns on fraud by the state insurance department and changing economic factors affecting insurance companies have put consumers in a better position to angle for the best price on auto insurance.



That savings could be squandered, however, if consumers fail to make prudent choices when comparing rates and selecting the right insurance carrier.



One area where drivers of older cars can get a substantial break in their annual insurance bill is by dropping comprehensive and collision coverage.



"Depending on the type of car you have, whether you should get collision and comprehensive (needs consideration) being that they're optional," says Mike Barry, spokesman for the New York State Department of Insurance.



It's just not a wise use of money to pay $800 a year to protect against a loss on a vehicle that may be worth only $1,000, says Jonathan A. Theodore, president of Theodore Consulting Group Inc., an insurance and financial-services consultancy in Suffern.



Add to that the deductible that's required when making a claim — $250, $500 or more — and "you're operating at a loss," he says.



With advent of the Internet, consumers have a number of ways they can compare rates to save money. Visitors to www.progressive.com, for example, can get quotes from Progressive and several other insurers at the same time.



Another way to compare is to call an agent who sells a number of different lines, such as Theodore's company. Whether contacted by phone, over the Internet or via e-mail, such multi-lines agencies can shop prices for you.



Defensive-driving courses are another way for New Yorkers to save money on auto insurance. The course pays for itself within a year or less by offering drivers up to 10 percent off the liability, personal injury and physical damage portions of their insurance bill.



Depending on the car, there are other discounts available, such as passive-restraint systems, anti-lock brakes and alarm systems.



Consumers may also want to weigh the cost of having an alarm system installed after-market as a way to reduce insurance costs. That's because insurers no longer offer the big discounts they once did for such systems. Today, car alarms are far more nuisance than deterrent, Theodore says.



That money might be better spent on side airbags or anti-lock brakes if such safety items aren't standard equipment.



One hassle in switching insurance companies is that the vehicle must be inspected, unless it's brand new. That requires drivers to go to an approved agent to photograph the car and note any damage. Failure to get an inspection results in the suspension of comprehensive and collision coverage after 10 days.



"It's five minutes out of your day, but it's important to do," Theodore said.



Receipts for after-market safety equipment or alarms should be photocopied and submitted with the application for insurance to insure the driver gets any discounts that the insurer might offer, since such items might not show up on the photo inspection.



You can also save money by raising your deductible, the portion of the repair bill that you pay. Be aware, however, that if your car is financed, the loan company may require you to have no higher than a $500 deductible.



Lastly, "Always pay the bill on time," Theodore says.