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.

Save on Your Insurance by Buying a Safe Car

The kind of car you drive affects your insurance premium. If you drive a muscle car, the chances are good your insurance costs will be higher than if you drove a station wagon.

In general, a safer car means a lower premium. (Unless you drive a really safe Bentley or Rolls, in which case the value of your car might offset any safety savings. Luxury cars are more expensive to insure.)

On Tuesday, the Insurance Institute for Highway Safety recognized 13 cars for their safety features. Four cars, seven sport utility vehicles, and two minivans earned “Top Safety Pick” distinction.

The institute says this year’s crop of cars underwent an even more rigorous evaluation process. The ratings were based on performance in high-speed front-, side- and rear-impact crash tests.

In addition to giving a performance grade for the three crash tests, the institute required that winners have ESC, or electronic stability control. (Read Insurance Blog posts on ESC here and here.) It is the first year the institute has imposed the restriction. The result is that no American cars made this year’s list. Two made it last year.

Showing the import of making the institute’s list, at least one U.S. car manufacturer is scrambling to modify one of its cars to be eligible for next test. Ford says it will add ESC to its 2008 Freestyle in hopes of getting the safety nod.

The German carmaker Audi, whose A6 was snubbed last year because of poor whiplash protection, changed its headrests in order to make the list this year. Their A4 and A6 models earned Top Safety Pick awards.

CNN Money has pics of all 13 award-winning cars. (Incidentally, they have a gallery of the most reliable cars, too. The only car that makes lists for safety and reliability: the Honda CR-V, which is pictured above.)

The best images, though, are the nine renderings of futuristic green (as in environmentally friendly) cars. The most unlikely appearance on this list comes from Hummer. Strange as it sounds, their 02 may be the most fascinating concept on the list—that and the VW Nanospyder.

What You Should Know About Car Theft

Do you drive one of these cars?

1991 Honda Accord
1995 Honda Civic
1989 Toyota Camry
1994 Dodge Caravan
1994 Nissan Sentra
1997 Ford F150 Series
1990 Acura Integra
1986 Toyota Pickup
1993 Saturn SL
2004 Dodge Ram Pickup
If so, you drive one of the top ten most stolen vehicles in the U.S, according to the National Insurance Crime Bureau (NICB). The NICB estimates that a car is stolen every 25.5 seconds.

People can do more to prevent theft, according to a recent release from the Insurance Information Institute. “All too often, consumer attitudes about preventing vehicle thefts are based on misconceptions, which can lead to expensive consequences for the unprepared victim,” says Institute vice president Carolyn Gorman.

Here are a few of those misconceptions:

Myth: Most Thefts Occur in Unprotected Areas
Myth: Stolen Vehicles Are Usually Found
Myth: Insurance Always Provides a Rental Car
Myth: Thieves Are Not Interested in Older Vehicles
A former neighbor of mine experienced that last one first hand when his beater truck was stolen. He eventually found it parked a few blocks down the street but it was missing the steering column. “Older vehicles are most often taken for their parts which are no longer manufactured and are too difficult or expensive to obtain,” says NICB president Robert M. Bryant.

What’s worse than getting your car stolen? Realizing you’re underinsured after your car has been stolen. Many owners of clunker cars drop their comprehensive coverage because they think it’s not worth the money. Problem is, comprehensive covers for theft and, in many cases, rental car coverage.

But it doesn’t always. The III advises people to check with their insurer about their rental car policy before they need one.