400 Pennies

The good news, your auto insurance premiums will decrease in 2007. The bad news, they’re only dropping an estimated .05 percent. That extra four bucks a year may not even buy one value meal, but it’s a positive trend in an industry known for steady price increases. Nationwide, this measly four dollars translates into hundreds of millions in total consumer savings.

The Insurance Information Institute (III) attributes the rate reduction to several factors—a more competitive marketplace, safer cars and drivers, some inventive fraud-fighting tactics and more accurate underwriting.

To those of you who have bemoaned credit-based insurance scoring, it is one of the reasons we’re seeing the price of auto insurance drop. Using credit to determine the price an individual will pay for insurance has its pitfalls, but overall has given insurers a more precise way to determine premiums.

So keep a clean credit history. Pay credit card balances completely, pay bills on time and don’t open too many cards or accounts at once. Credit-based scoring is here to stay, so work within the system to raise your score.

Although it’s only .05 percent, some tweaks to your coverage could reduce the cost further. III recommends raising your deductibles and reducing your coverage. It sounds a bit counterintuitive coming from an insurance resource. However, if you can cover your losses in the event of an accident without sacrificing your financial well-being, raising deductibles and reducing coverage can shrink your premium price between 15 and 20 percent.

No comments: