1. Drive Safely
I know that sounds obvious but it is also true. One speeding ticket can increase your policy by $150 or more a year for up to five years. One at-fault accident can increase your policy by $300-$500 a year for the same period. In addition to the surcharges you see, many companies also tier their rates. The best tiers with lowest rates are for their best drivers. Moving violations and at-fault accidents not only add surcharges to your policy it can move you into a tier with higher rates before adding surcharges.
2. Appeal all at-fault accident surcharges
It just makes sense from a cost/benefit standpoint. For a one-time fee of $50 you can appeal a surcharge and have a chance to have the surcharge vacated. Or, you can choose not to appeal; accept the surcharge and be guaranteed to pay an additional $300 plus a year for up to five years. You should appeal even if your insurance company has “forgiven” your accident. Here’s why. Just because your company is not charging you for it does not mean the accident didn’t happen. The “forgiveness” only lasts while you are insured with that company. If you become dissatisfied with your company and try to change carriers the at-fault accident would be seen by those carriers and reflected in their rates. If you successfully win an appeal there is no surcharge record to follow you around.
3. Take the highest Collision deductible you can afford.
We find this to be especially true with inexperienced operators, urban drivers and those drivers with surcharges. For those drivers with surcharges there is a double benefit because Collision is one of the parts of the policy that surcharges are generated from. Surcharges are calculated as a percentage of certain coverage premiums, including Collision. By taking a higher deductible you are reducing the premium and thereby reducing the surcharge. We have had cases where increasing the Collision deductible from $500 to $1,000 has reduced the policy premium by $350 or more.
We do not find the same results with increasing the Comprehensive deductible. In fact, in most cases we find the $300 deductible to still be the best buy.
4. Make sure all drivers are properly listed.
This is a particularly difficult portion of the policy to stay on top of since it can change frequently. Children come and go from the house. Then they come back again. Roommates change. They own a car then they don’t. Parents are splitting custody with the child spending time at both households. These are all events that can affect premium. Take a look at your policy. Are just the people who actually live in the house still on the policy? If they have their own cars are they deferred on your policy? If they never operate your car and never will have you had them excluded from the rating?
As things change at your house you may be able to see some savings but you won’t if you don’t tell your agent about them.
5. Move to the suburbs.
Some people will dispute this by pointing out that moving to the suburbs will result in needing to drive more miles which can affect premiums or higher gas usage. I agree if we are talking about moving from downtown Boston to Westford. But how about from Somerville or Cambridge to Arlington? I recently did an auto quote for someone looking to rent an apartment in one of these three towns. In her particular circumstances Somerville came in at $1,539 while Cambridge came in at $1,400 and Arlington at just $1,168. That’s right. She would pay almost $400 more for living on the Somerville side of the border rather than the Arlington side.
Now, not all companies will have the same discrepancy between these particular towns but rating territory is still one of the main drivers of premium. Having a garaging address in a lower rated town can save hundreds of dollars a year.
I hope you have learned something new in this blog. Please call us at 800-559-5553 or email us at info@columbiainsuranceagency.net if you would like to ask us a question or review your current auto policy. Ask us about our free on-site and Registry services.
Columbia Insurance Agency, Inc. is a leading agency administrator of group auto and homeowners programs in Eastern MA. In particular we have created a niche with the companies in the bio-tech industry. In fact, we have been chosen by MassBio to administer the group auto and homeowners insurance program for the employees of their 600+ member companies.