car insurance

How to Find Affordable Car Rentals

February 17, 2020 by admin 4 Comments

Whether for work or pleasure, there are car rentals companies just waiting to serve you. Enterprise, Hertz, Avis, Alamo, National, and Budget are among the national brands to consider, along with smaller and regional brands such as Dollar, Thrifty, Payless and a handful of independent car rental companies. Finding affordable car rentals can take some work, so keep these tips in mind as you begin your research.

Affordable Car Rentals

1. Consider the Vehicle Needed

Before you begin shopping for a car rental, consider the type of vehicle needed. Know that car rental prices are based on vehicle size and type with a subcompact car such as the Nissan Versa Note costing the least and a luxury SUV such as the Lincoln Navigator usually costing you the most. You should also know that you may be offered a free upgrade especially if your vehicle type is not available. Accept the upgrade if you want, but also consider that you may be offered a less fuel-efficient model.

2. Use Internet Sites to Your Advantage

Consumers can compare rates between car rental companies by using travel sites such as Priceline, Expedia, Orbitz, Kayak, and Travelocity. Compare the rates on these sites and then go directly to the car rental company pages to find the best rate. Rates may vary due to special arrangements travel sites make with one or more companies.

3. What Discounts May Apply

You may be entitled to discounts and not even know it. Most car rental companies automatically provide a rate reduction for AAA and AARP members. They also extend discounts to certain credit card holders, national clubs, and frequent flier program members. If you are not sure that you are due a discount, then just ask.

4. The Long and Short of Car Rentals

Consumers should know that car rental terms are sometimes cheaper for longer rental periods. For instance, if you need to rent a car for four or five days, you may pay more than the person that rents a car for a week. If you need a long-term rental, such as for a month, your daily rate may be the lowest available. For short term rentals, consider renting for a week and returning the car early to enjoy the lower rate.

5. Why Location Matters

Not all rental car locations are the same. For instance, if you rent your car from Hertz and are considering an airport location, then you will pay a higher rate than for a rental that is not at the airport. Airport vendors pay airport management high rent for the convenience of the location. That extra cost is passed on to consumers. If you are flying and need to rent a car upon arrival, take a shuttle bus or taxi to an off-airport location. Daily rate savings of $5 to $10 are possible off-site.

6. Fees, Taxes, Insurance, and Special Charges

That $24.99 daily rate quoted for a midsize sedan may sound too good to be true. Well, it may be true, but it can also come with other charges that can increase your final cost. Among the fees charged are airport concession, parking, reimbursement, and a drop-off fee if you are returning your vehicle to a different location. Be mindful that a peak season surcharge may be passed on to you, as well as regional, local, and state taxes. You’ll also be charged for car insurance, but you may be able to get this charge waived if your insurer covers car rentals. Special charges may also be added, including for a child’s safety seat or a ski rack. Make whatever special arrangements you need in advance and find out what fees apply.

7. Fill the Fuel Tank Before Returning

One of the most insidious charges car rental customers may face is when they return a car without first topping off the fuel tank. Take a few minutes to stop at a service station nearest the rental car outlet and fill the tank. If you do not, then you will be charged the rate the car rental company charges, which can cost two to three times per gallon the local pump rate.

Shop Around

Savvy consumers can save money on their car rental by shopping around and asking for discounts. If you aren’t finding a deal, contact the car rental company directly and ask for their best price. Loyalty can help you too, so if you are a regular user of one rental company, tap that loyalty to procure further discounts.

Devon Janse van Rensburg

How to Get the Most Auto Insurance Coverage for the Money

October 4, 2019 by admin Leave a Comment

Auto insurance will cost you, but savings can be had.

The cost of auto insurance puts a huge dent in some wallets. Drivers in Michigan, Louisiana, and Oklahoma pay far above the national average while drivers in Maine pay the least.[1] Among auto insurers, rates can vary widely, and consumers don’t always know why they’re being charged so much.

You can’t do much about the state where you live—besides moving—but you can get the most coverage for your money by keeping some things in mind as you shop for auto insurance.

Credit Matters

Your credit history reflects on what you pay for auto insurance. Insurers develop an “insurance-risk score” or “insurance credit scoring” based in part on your credit score, theorizing that you’re less likely to file a claim if you have good credit.[2] Your credit score is easily available to you, but your insurance score is not (typically, you’ll have to visit a credit monitoring service such as TransUnion to find it, not your insurance company). In any case, if your credit score is high, then your insurance rates should reflect your insurability.

Personal Demographics

Your marital status, gender, age and the city where you live are factors in determining insurance premiums. The last category can make a big difference in what you pay—if your zip code or street address is coded wrong, you might be charged a rate far above what you should be paying.[3] Therefore, it is important to review your declarations page for accuracy.

What You Drive

Before purchasing that turbocharged sports coupe, contact your auto insurer to get a quote for car insurance. Indeed, your agent can tell you which cars cost the most to insure in any given vehicle segment. Engine size isn’t the only consideration: insurers charge more for cars that don’t hold up as well in an accident. They may also raise rates for cars without recent safety features including side curtain airbags, rearview cameras, and lane departure warning.[4]

Your Driving Record

If you have tickets, then you may have points on your driving record. Points send a signal to auto insurers to raise your rates based on an algorithm set by each insurer. Your insurer won’t tell you how that works, but you can contact your Department of Motor Vehicles to obtain your driving record. If old points have not been removed from your record or points have been wrongly assigned to your record, you can have the DMV make the correction and forward a copy of your updated record to your insurer.[5]

Seek Discounts

Insurance companies offer discounts for drivers who drive just a few thousand miles in one year. Further, discounts are offered if you insure your auto and home with the same company, have been with that company for several years, are a safe driver or have recently completed a driver’s training course. Ask your insurance agent about available discounts—information that’s not always readily volunteered.[6]

Shop Around

Get at least three price quotes from different insurers with similar coverage to make comparisons easier. You may be able to save money by dealing directly with a company over the phone or via the Internet instead of through an insurance agent.

If you belong to an alumni association, a business group or some other association, a group plan can offer additional discounts. Moreover, ask your employer if the company offers a group plan for its employees and their families.

Save Money

It pays to review your auto insurance policy annually as it may reveal overlooked discounts or even mistakes that are costing you money. Never assume your policy reflects your current information as your address may have changed, drivers may have been added or dropped, or other factors may influence what you pay.

Sources

[1] Insure.com: Car insurance rates by state, 2019 edition — https://www.insure.com/car-insurance/car-insurance-rates.html

[2] The Balance: What is Insurance Credit Scoring? https://www.thebalance.com/what-is-insurance-credit-scoring-4156729

[3] The New York Times: Your Neighbor in an Adjacent ZIP Code May Pay Less for Car Insurance — https://www.nytimes.com/2018/10/19/your-money/car-insurance-neighbor-zip-code.html

[4] Insurance Information Institute: What determines the price of an auto insurance policy? — https://www.iii.org/article/what-determines-price-my-auto-insurance-policy

[5] North Carolina Department of Motor Vehicles: Driving Records — https://www.ncdot.gov/dmv/offices-services/records-reports/Pages/driving-records.aspx

[6] Allstate: 6 Car Insurance Discounts That May Save You Money — https://www.allstate.com/tr/car-insurance/tips-for-car-insurance-discounts.aspx

Image by 3D Animation Production Company from Pixabay

IIHS Crash Testing and Your Insurance Premiums

May 10, 2019 by admin

Both the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS) conduct crash tests to determine specific vehicle model safety. Both sources should be considered by consumers when purchasing a new or late-model used vehicle. When it comes to setting auto insurance rates, it is the IIHS testing that the insurance companies use to determine your insurance premiums.

About the IIHS

The IIHS is wholly funded by numerous insurance companies ranging from smaller companies such as the Rockingham Group, Tennessee Farmers Mutual Insurance Company and Grange Insurance to such household names as GEICO, State Farm and Allstate. Additional funding is provided by several insurance funding associations.

Founded in 1959, the IIHS is an independent, nonprofit educational and scientific organization whose mission is to reduce insurance losses from crashes on America’s roads. The IIHS opened its Vehicle Research Center in Virginia in 1992 where it conducts front, rear and side tests on vehicles and assigns a rating. The institute uses crash test dummies and sled labs for vehicle testing, and also tests child booster seats. Yes, the test scores can affect your insurance premiums (more about this later), but not your uninsured motorist claim.

Five IIHS Crash Tests

Since the IIHS began testing vehicles in 1992 it has modified and expanded its crash testing to encompass additional areas of the car. Its earlier tests measured moderate overlap front crashes as well as rear crash protection to assign a head restraint rating. Side-impact and roof strength tests were added later; a small overlap front test was added in 2012.

The IIHS’ moderate overlap frontal test has a vehicle traveling at 40 mph toward a barrier. The barrier face, of aluminum honeycomb construction, measures approximately two feet tall. Behind the wheel sits a crash test dummy, one that is equal in size to the average male driver. This test has 40 percent of the total width of the vehicle hitting the barrier on the driver’s side. It then measures the impact of the crash on the vehicle as well as on the driver.

The small overlap frontal test also has the vehicle traveling at 40 mph, with 25 percent of the vehicle required to hit a 5-foot rigid barrier, similar to a vehicle hitting a fixed object such as a telephone pole. The same sized crash test dummy used in the first test is used here with the IIHS paying especially close attention to how vehicle restraint systems such as airbags and the vehicle’s safety cage protect the driver.

A side test has been used by the IIHS since 2003, one that employs a moving barrier that weighs 3,300 pounds and corresponds to the weight of a small SUV hitting the driver’s side of the vehicle. Crash test dummies similar in size to an average sized female driver as well as a child sitting in the rear seat behind the driver are used. The IIHS also conducts a roof strength test that employs a metal spike that is pushed into one side of the top of the vehicle and is required to bear a force that is four times the vehicle’s weight before reaching five inches of crush to achieve a good rating. This test mimics what a vehicle might experience in a rollover accident, something that takes the lives of thousands of people annually.

Since 1995, the IIHS has been conducting rear crash testing with an eye toward measuring the impact of front seat vehicle restraints, particularly headrests. Whiplash injuries can be minimized with improved head protection, with this test approximating a rear end collision corresponding to a 20 mph crash against a stationary vehicle.

Assigning Ratings to Evaluated Vehicles

Car manufacturers strive to meet the highest crash test ratings offered by the IIHS. It is a two-tier rating system that gives vehicles either a “top safety pick” or “top safety pick+” rating, the latter assigned to vehicles that have completed the moderate overlap front test.

To achieve a top safety pick+ rating, vehicles must have received good ratings in four of the five tests and no less than an acceptable in the fifth test. A top safety pick designation is assigned to vehicles that receive good ratings in a rollover, rear, side, and moderate overlap front tests.

Four grades are assigned with each test: good, acceptable, marginal and poor. The IIHS maintains scoring for vehicles from its earliest test years and posts that information to its website.

Ratings and Your Insurance Premium

Your chances of being injured in an accident are far greater in a lighter vehicle. And that is why the IIHS advises consumers to “pass up very small, light vehicles” in its Shopping for a Safer Car brochure. Choosing vehicles that rank higher by the IIHS will result in lower insurance premiums. You can save additional money by opting for a higher deductible, bundling your home and car insurance policies, and searching for discounts.

Vehicle safety testing helps insurers and consumers alike. Insurers assign risk based on a number of factors including your vehicle’s crashworthiness. Save money on insurance and improve your chances of surviving an accident by buying a vehicle that has a top safety rating.

How to Save Money on Car Insurance

November 2, 2018 by admin 3 Comments

Your car insurance costs may be on the rise with several factors possibly contributing to that increase. For example, a new driver, a different car or a change in coverage can send your rates soaring. Just the same, you can save money on auto insurance by implementing the following money-wise strategies immediately.

2019 Lexus ES

1. Review Your Credit Reports

Every consumer shopping for car or homeowners insurance is assigned an insurance score. That three-digit score is based on certain credit report characteristics and is used to measure risk, not creditworthiness. Just as you can retrieve your credit score, you can obtain your insurance score.

Because both your insurance score and your credit score are based on your credit reports, you should review all three of your consumer credit reports to determine if there are problems listed that may contribute to a lower score. For instance, late credit card payments, high outstanding balances on certain loans and a checkered credit history can impact both scores.

Free copies of your credit reports are available through AnnualCreditReport.com. Review your reports for accuracy and work on building a better credit history. Gradually, your insurance score will rise thereby lowering your auto insurance rate.

2. Review Your Insurance Coverage

How much insurance do you have? How much insurance coverage do you need? If you have not reviewed your auto insurance policy in some time, do so before it is set to renew.

You can save money on car insurance by assuming greater risk. Instead of a $200 deductible for comprehensive coverage, consider $500. Collision coverage is ideal for most cars that are less than 10 years old, while dropping collision coverage for high mileage older vehicles can save you money.

New drivers on your policy will cause your insurance rates to spike. Encourage your teens to maintain good grades as insurers offer discounts for students that have at least a “B” average.

2019 Volvo XC40

3. Qualify For Discounts

Insurers regularly offer discounts to consumers in a bid to attract and retain their business. You may qualify for discounts in several areas, immediately reducing your auto insurance premium by at least 10 percent.

Consumers who use the same insurer for their cars and home will receive a discount for bundled insurance. Contact your insurance agent to inquire about available discounts including safe driver, anti-theft device and for completing a defensive driving course. Affinity discounts are available if you belong to certain associations or organizations, such as a credit union.

4. Improve Your Driving Record

Points on your driving record can send your car insurance rates soaring. Employing safe driving habits can gradually lower your rates with your record typically cleared of all of its infractions within three years.

You can speed up the point reduction by completing a department of motor vehicles approved safe driving course. Visit your state’s DMV site to learn what courses are available. Typically, if you successfully complete a state-recognized driver safety course, the DMV will shave as many as three or four points off your driving record, lowering your car insurance premium.

2018 BMW 740e

5. Consider Your Future Car Purchases Wisely

Your heart says, “sports car” but your head says “family sedan.”

Although there is nothing wrong with following your heart, your head may insist that you save money. This is where your choice in vehicle matters and will affect your insurance rates.

But before you buy any car, make a call to your insurance agent to receive an insurance quote. You can also find out which vehicles will cost you less by visiting the Insurance Institute for Highway Safety’s website to retrieve the crash test ratings for today’s new cars.

The IIHS is funded by the major insurance companies and your rates are based in part on how well a car holds up in a crash. Choose a model with a “top safety pick+” rating and your insurance agent will offer a correspondingly lower rate quote than a vehicle that isn’t rated as high.

Other Underwriting Factors

Each auto insurance company has its own insurance rating system, but there are general guidelines these companies follow that make it possible to compare coverage. Other factors that can affect your insurance rates include where you live, your gender and age, your marital status and the number of miles you drive annually.

Gap Insurance May Save You Thousands of Dollars

June 28, 2018 by admin 1 Comment

Here’s an unpleasant thought: you buy a new car and within months it’s stolen or totaled following an accident. You believe that your insurance coverage is excellent, but are soon rudely awakened when your finance company sends you a bill for thousands of dollars. Had you chosen gap insurance, your finance company wouldn’t be demanding payment. That is if you knew about such coverage in the first place.

car crash gap insurance — Is your auto insurance sufficient for protecting you against total loss?

What is Gap Coverage?

Gap insurance, also known as gap coverage, pays the difference between what you owe on your vehicle and what your car is worth. Gap coverage is especially important if you do not put enough money down on your new car and its value has slipped below what you owe on it.

For instance, you buy a new car and pay $27,500 for it, putting $2,500 down. You take out a loan for $25,000 and five payments later your outstanding balance falls to $23,500.

Unfortunately, you get into an accident that destroys your car, which soon reveals how vulnerable you really are. You file a claim with your insurer and the insurance company sends your finance company a check for $19,500, representing the value of the car minus your $500 deductible. The difference here is $4,000, an amount that your finance company says that you still owe on the loan.

That gap represents the difference between the loan balance and your insurance payment, monies that you must repay.

Going Upside Down

Many car shoppers are “upside down” or “underwater” with their auto loans, a term that also describes some homeowners.

Typically, borrowers are upside down for two reasons:

1), they do not put enough money down, and

2), the car loses a significant amount of its value within the first few months of ownership.

Indeed, it is not uncommon for a new car to depreciate rapidly with Edmunds.com noting that a new vehicle loses on average 11 percent of its value the moment it drives off the dealer’s lot. Several months later the car’s value may fall by 25 to 30 percent, making it entirely possible that you owe more to your finance company than what your insurer says it is worth.

Gap Protection Coverage

You may not need gap protection if you put 20 percent or more down and your loan term is short, such as for 36 months. Some consumers make the mistake of rolling their related fees and taxes into their loan and perhaps adding extended warranty coverage as well.

One way to make sure that you are not buying a car that will immediately put you underwater is by using an auto loan calculator such as the one that’s available online from Bankrate.com. Then, compare that number with what Kelly Blue Book lists as your vehicle’s depreciation rate.

As long as you owe less for your vehicle than what it is worth, then you are okay.

Buying Gap Insurance

Before you run out to buy gap coverage, you should review your loan purchase agreement as you may already have it. Such coverage is more common if you lease a vehicle than if you were to finance one. In any case, your finance company may have added that coverage with your agreement.

Indeed, some lenders require gap coverage because they know you may find it difficult to settle the difference later on.

Your current insurer may offer gap coverage, a small cost that’s added to your auto insurance bill. Contact your insurer to get a quote for the gap or actual cash value insurance.

Keep in mind that you will still have to pay a deductible and may receive less money if your car has high miles or is in poor condition. You can cancel gap coverage once you determine you are no longer upside down.

Avoid a Financial Catastrophe

Gap coverage may save you from financial calamity, enabling you to get back on your feet quickly. Without such coverage, you may find yourself unable to afford a replacement vehicle, worsening an already serious problem.

See Also — 7 Ways to Trim Car Insurance

Photo credit: La Cara Salma via Wikipedia. This file is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported, 2.5 Generic, 2.0 Generic and 1.0 Generic license.

Low-Income Drivers Penalized by Auto Insurers

June 28, 2016 by admin 1 Comment

Americans resoundingly reject non-driving characteristics in determining auto insurance rates.

If you’re a low-income American, chances are you’re paying plenty more for auto insurance than other citizens even if you have a similar driving record and home address. Those are the findings of the Consumer Federation of America (CFA) based on a study the non-profit organization released on Monday.

Low Income Status = Higher Insurance Premiums

The CFA evaluated minimum limits liability premiums shared by men and women in 15 cities by five of the nation’s largest auto insurers. Specifically, the CFA found that premiums surged by an average of 59 percent, or $681 annually when characteristics of the drivers were changed to denote a lower economic status. Auto insurance is required in all states with New Hampshire the lone exception. Insurance is regulated at the state level.

“Insurance companies should judge you on how you drive, not who you are,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner. “Insurance companies are penalizing good drivers by hundreds and sometimes thousands of dollars each year based on economic and social status, and the end result is that the poor pay more, much more.”

Five Non-Driving Factors

Auto insurers use five factors when developing quotes for consumers. They are: level of education, occupation, homeownership status, ownership of a car during the prior six months, and marital status.

The CFA found that drivers with the same driving record and living at the same address may pay dramatically different rates, especially if multiple factors are considered. For this study, 15 cities were examined with the five largest auto insurance companies surveyed — Allstate, Farmers, GEICO, Progressive, and State Farm studied.

The study revealed the average premium for all drivers with high economic status indicators was $1,144. On the other hand, the low economic status driver is charged $1,825. That’s 59 percent or $681 more than people with a higher net wealth.

Of the five insurers survey, GEICO (92 percent) and Progressive (80 percent) charge the largest premium increases to lower income drivers residing at the same address. The largest per dollar increases come from Allstate ($915) and Farmers ($900). The lowest increases are assessed by State Farm, which charges $217 more per year or is 13 percent higher.

Your Home Address

Depending on where you live, your auto premium as a low-income driver can come in much higher than average. Drivers in Queens, Jersey City, Boston, Atlanta, Minneapolis, Houston, and Jacksonville face the most significant increases, topping $700 per year versus high-income drivers.

On the other hand, if you live in Los Angeles your rate may average only $80 per year higher, an increase of 9 percent. That’s due chiefly to a 1988 voter proposition passed by Californians whereby non-driving-related factors (except for marital status) could not be considered by the insurance companies.

Survey Says

The CFA authorized ORC International to conduct a poll of 1,000 Americans from June 9-12, 2016, to gauge their opinions about auto insurance. The organization discovered that a large majority of Americans believe that auto insurance premiums should be related to policyholders’ driving safety record and accident history. They also indicated that the insurance companies should not use personal economic factors such as their education or occupation in establishing rates.

In particular, 84 percent of Americans believe that auto insurers are acting very or somewhat fair in using moving violations as a factor in developing insurance quotes. Some 83 percent believe that if drivers are in an accident they caused, then their rates should be reflected accordingly.

When non-driving factors are considered, the respondents shifted their answers dramatically in support of the drivers.

Indeed, only 38 percent believe that credit scores should play a factor in determining insurance rates. Home ownership (35 percent), job occupation (35 percent), and marital status (32 percent) were other factors considered. Only 30 percent agreed that no previous insurance because of no car should be a factor. Some 29 percent thought education level should be used as a determining factor.

“The American people don’t like the idea of insurance companies using personal and economic factors to set premiums, even though most people don’t realize how much of an impact these non-driving characteristics have on the price they pay for coverage,” said the study’s co-author Doug Heller.

In two instances, the insurers bucked the trend, giving lower-income drivers an edge. For instance, Allstate lowered rates by 19 percent for the lower economic status female driver in Chicago and by 4 percent for both male and female drivers in Oklahoma City.

Free Quotes or Not

As is common practice, the insurance companies provide online quotes for consumers, but not always. The CFA has found that if income status is changed from high to low, then online quotes are typically not supplied to the latter. Even with such key factors as address and driver record considered, the insurance companies often refer people to local brokers or to partner companies.

The CFA continues to advocate a state-by-state change to auto insurance underwriting to adopt more equitable methods for determining insurance rates. Because auto insurance is mandated by law in all but one state, then regulators and legislators should protect consumers from unfair practices, including those outlined in its report.

Car Insurance for the Poor? Good Luck With That.

February 9, 2016 by admin 2 Comments

Renters may pay much more for their auto insurance coverage than do homeowners.

If you’re a low-income individual, more than likely you rent your home and don’t own it. Even if you’re a good driver, obtaining affordable car insurance is more costly for renters, than for homeowners, a fact recently uncovered by the Consumer Federation of America (CFA).

money tussle Indeed, in a press statement released on Monday as well as in an accompanying media teleconference, two CFA representatives — Bob Hunter, Director of Insurance and Doug Heller, Insurance Consultant — articulated just how much more the renting poor may pay for their auto insurance.

Higher Rates Even for Good Drivers

CFA research was conducted to determine what those differences might be, finding that renters pay 7 percent per year more on average than homeowners. That translates to $112 annually, not a small amount for people of limited means.

Auto insurance companies have long used home ownership as one criteria for determining rates. Other factors may include an individual’s credit score, zip code, education, occupation, the type of vehicle driven, and driving record. Thus, consumers not only pay more for their auto insurance because they rent, but likely far higher than that when other factors are taken into consideration by insurers. By the way, uninsured motorists comprise one of eight drivers in the US, according to the Insurance Information Institute.

Renters already carry a burden when it comes to their finances. According to 2013 Federal Reserve Bank data, the average annual income for renters in the US was $27,800 compared with $63,400 for homeowners.

“To raise people’s auto insurance premium because they can’t afford to buy their homes unfairly discriminates against lower-income drivers,” said J. Robert Hunter, CFA’s Insurance Director and the former Insurance Commissioner of Texas. “A good driver is a good driver whether she rents or owns her home. Insurance companies should not be allowed to target people based on homeownership status.”

Minimum Limits Liability Coverage

The CFA surveyed minimum limits liability coverage in 10 cities scattered across the United States and chose the seven largest insurers for the analysis. The seven insurers were: State Farm, Geico, Allstate, Progressive, Farmers, Liberty Mutual, and Nationwide.

To determine the insurance rate, the CFA utilized each company’s website to acquire two premiums in each city for a sample 30-year-old female motorist with a perfect driving record and a 2005 Honda Civic to insure. Both premium inquiries were identical, save for one category — whether she rented her home or owned it.

While most of the increases for the renter came in single digits, there were several outliers that raised rates by double digits, including by 47 percent for Liberty Mutual customers in Louisville, Kentucky. In effect, the sample owner of the Honda Civic would have been charged $768 per year more than had she owned her home.

Notably, Liberty Mutual was far more likely to charge renters more for their auto insurance than any other company, tacking on $307 per more per year on average. On the other hand, Geico did not use homeownership as a criteria for renters, thus rates for renters and homeowners were the same. Curiously, Allstate actually provided renters with lower insurance rates than for homeowners in Chicago, coming in at 11 percent lower.

The CFA provides a pair of tables showing the annual premium charges in total dollars and percentage by company in each of the 10 cities. The organization also checked rates in an eleventh city, Oakland, California, confirming that auto insurance rates for homeowners and renters were the same. That’s because California law prohibits insurers from setting rates based on home ownership, something the CFA would like to see the other states follow.

Advocating for the Poor

“Using customers’ homeownership status to determine premiums is another way in which insurance companies are piling on lower-income Americans,” said Douglas Heller, a consumer advocate who worked with CFA’s Michelle Styczynski to analyze the data in the study released today. “With all these different rating factors that have nothing to do with driving, auto insurers are charging good drivers hundreds and sometimes even thousands of dollars extra just for being poor.”

Hunter concluded that while people may have a choice whether to own or rent a home, they aren’t given that choice when it comes to purchasing car insurance. “State Insurance Commissioners and elected representatives should step in and stop this practice,” said Hunter.

The CFA representatives concluded by stating they plan to forward their findings to each state’s insurance commissioners and urge them to eliminate the gap between homeowners and renters.

Charts and date courtesy of the Consumer Federation of America (CFA).

Car Insurance Savings for the New Year

January 4, 2016 by admin 1 Comment

Practical ways to save on car insurance this year.

A new year provides a time for reflection on what has passed as well as what is on the horizon. This year, you may have some goals in mind, including earning more money, taking a vacation, perhaps learning something new. The new year should also be a time where you review your expenses, including what you pay for car insurance. To that end, we’ll take a look at some ways you trim your auto insurance bill.

A sports car like the Nissan GT-R is luscious,
but it also comes with a high car insurance premium.

1. It begins with the car you want to buy.

Car sales over the past few years have been strong, thanks to an improving economy and newly designed models offering safety, technology and comfort features that weren’t even around a decade ago. Pent up demand means people are buying, but it is the type of car you purchase that will impact your auto insurance costs significantly.

Sportier cars will cost you more to insure as well as will most luxury cars. You’ll pay more for a car with a higher horsepower engine and a manual transmission than you would for a car equipped with a smaller or less powerful engine and an automatic transmission. That doesn’t mean you can’t enjoy the car you want, but it does mean that your car insurance rates will reflect the higher performance, elevated price or both.

Smaller cars such as this Mini Cooper S Convertible
offer lower auto insurance premiums, but not always.

2. It continues with your credit score or insurance score.

Did you know that your credit score can impact your auto insurance premium? Since the beginning of the millennium, most insurance companies have incorporated your credit history into their matrices, when determining how much to charge drivers for insurance explains Kevin Lynch of The American College of Financial Services.

Said Lynch, “In addition to driving records and accident frequencies, credit was added to the mix, because empirical evidence showed the combination of these three factors could predict losses for insurance companies.” Insurance of any kind is based on risk assessment, thus these three factors are widely used by insurers to determine insurability.

You can obtain your credit scores for all three credit reporting bureaus by visiting MyFico.com. You can also ask your insurance company for your insurance score, which is based on your credit reports. An insurance score looks at some, but not all the factors pertaining to your credit history to assign you a score. Importantly, you should know that not all states allow the use of credit-based scores in determining premiums according to the National Association of Insurance Commissioners.

Audi Q3 — Models such as the BMW Q3 equipped with safety features
can lower your auto insurance rate.

See Also — It’s a Wrap: 2018 in Review

3. Savings are realized by taking all available discounts and other cost saving measures.

All auto insurance policies feature deductibles. Deductibles are your share of the cost of claims you make, such as for an accident or theft. If your deductible is $500 you’ll pay more for car insurance than for deductibles beginning at $1,000. You might find that your 10-year old car is no longer worth backing with collision coverage. Dropping same can save you money.

Lynch also notes that combining your insurance coverage can save you money. Thus, if you bundle your home and auto insurance policies under one insurer, you’ll receive a discount. Some insurers also include other coverage, such as boat, motorcycle or an RV.

Work with your insurer to find other discounts. Lynch notes that families with teenagers can save money if their son or daughter has good grades. But he also warns that consumers shouldn’t be so intent on saving money to forego coverage that may not be required in their area such as Uninsured and Underinsured Motorist Coverage. Explains Lynch, “…considering the number of uninsured drivers on the roads in the USA, can you really afford not to have the coverage?” Approximately 1 in 8 drivers is uninsured according to the Insurance Research Council (IRC).

Whether used for work or pleasure, this Chevrolet Silverado delivers.

Insurance Savings This Year

Just as you review your car insurance policy, make a point to check your other insurance coverage — health, dental, life, home, and the rest.

Your insurance agent is there for you. Just the same, use your review time to obtain quotes from competing insurers. You may find additional savings simply by switching providers.

Photos copyright Auto Trends Magazine.

8 Car Rental Tips for the Holiday Season

November 23, 2015 by admin Leave a Comment

Tens of millions of Americans will take to the road this holiday season, traveling to visit family and friends for Thanksgiving, Christmas, and New Year’s Day. While many will depend on personal transportation, flying, or mass transit services, others will be in the market to rent a car. The car rental maze can be difficult to navigate no matter the time of the year. Therefore, when it comes to renting a car during high volume seasons, you should keep the following tips in mind.

Dodge Charger

1. Understand what you want. Define the type of car you want to rent. If you’re looking for a compact sedan or a large utility vehicle, the prices for each type of vehicle will vary sharply. And if you’re looking to save money, choose the smallest and the least cost efficient model of all. A sports car rental may seem ideal, but it can bust your budget.

2. Book your car rental as soon as possible. The longer you wait to book a car rental, the less likely you will find a great deal. Moreover, the inventory of available cars will shrink considerably as you approach your rental period. As soon as you know your plans, begin your search.

3. Visit the gigantic travel sites. There are multiple travel sites online, each of which offers deals on car rentals. A site such as Kayak.com may provide everything you need as it pulls information from other sites, including Hotwire, Priceline, Expedia, and Travelocity. You might also search each site individually as well as add Alamo.com, Orbitz.com, and RentalCars.com to your search. Also consider the “no name” or generic rental car companies — Hertz may be the name you know best, but Advantage or Fox Rent a Car may offer the better deals.

Nissan Versa Note

4. Avoid costly airport rentals. You may live near an airport and find multiple car rental companies on site. But convenience has its cost — you’ll pay as much as 20 percent more to rent a car located on airport property. Instead, shop for a car locally and pocket the savings.

5. Ask for available discounts. Discounts on car rentals are available, but you need to ask for them. If you are a AAA or AARP member, discounts should be attainable. You might also qualify for a reduced price if you are a military member or a veteran. Typically, discounts are given over the phone or by visiting the car rental company’s website directly.

6. Opt for a longer-term rental. Do you say that you only need a car for five days? You may actually pay more for your car rental than the person who rents a vehicle for a week. Car rental companies often offer excellent deals for customers when renting by the week, then when renting by the day. If you choose the longer rental, you can return the car earlier and still reap the savings.

Infiniti QX70

7. Understand your total costs. Rental car companies will often dangle low rates to entice consumers. On closer inspection, you may discover a host of fees, including collision damage waiver and property-theft coverage. If you own a car and have collision insurance, then that coverage probably includes a rental car — contact your insurance agent to confirm the same. Holders of the American Express card are automatically covered for collision insurance as well as some Visa and MasterCard customers. Be certain to inspect the car before you drive off — even the smallest dent or scratch could be ascribed to you if you fail to identify the same before you leave.

8. Avoid these costs. Rental car companies typically provide a full tank of gas when you take possession of the car. Always top the tank before returning the vehicle, otherwise you might be charged two to three times the cost of fueling if the rental car company does this for you. Further, you should know that you’re responsible for tolls, parking fees, and other costs when driving. Some companies charge a daily rate for a toll transponder on top of the fees you’ll pay for using the tolled roads.

Special Considerations for One-Day Rentals

What if you need a rental car for only one day? What is the best way to obtain such a vehicle without getting hosed?

A company such as Zipcar may be the best deal for you. Instead of paying for the day, you pay by the hour — typically from $7.50 per hour or up to $69 per day. So, if you’re driving to grandma’s house and she lives 50 miles away, you may be gone for six hours and end up paying about $45. That cost includes gas, insurance, and up to 180 miles of driving.

Another option for people who are staying within a metropolitan area, but still need transportation to get them back and forth is to use a service such as Lyft or Uber. Both ride-sharing services offer rates cheaper than taxi service and door-to-door delivery.

7 Ways to Trim Car Insurance

June 4, 2015 by admin 2 Comments

You may not have reviewed your car insurance until the day that you took delivery of a new car or added a driver to your policy. Surprisingly, you find yourself faced with a minor crisis, one that you were wondering how you will meet the added cost. Indeed, it may have come in at a much higher rate than what you had anticipated.

Fortunately, there are sensible ways for you to trim your car insurance costs. We will review seven of them.

1. Perform comparison shopping. The best way to save on car insurance is to comparison shop. Auto insurance premiums can vary by hundreds of dollars amongst providers for the same coverage. So, obtain several quotes, then call your current insurer and ask for the company to match the lowest rate. If they can’t or won’t budge, then switch.

2. Know your credit rating. Your credit rating can impact your insurance premium. Insurers develop a credit-based insurance score and utilize that three-digit number to establish your rate. Your scores are ultimately based on your credit reports — if the information about you is wrong or negative, it can lower your score. Obtain copies of all three credit reports (i.e., Experian, TransUnion and Equifax) by visiting AnnualCreditReport.com. In fact, you are entitled to one free copy of each company’s report annually.

3. Find package discounts. You may be entitled to car insurance discounts, but you don’t even know it. For example, discounts are routinely dispensed to customers who have more than one vehicle insured. Additionally, you can obtain discounts by having the same insurer bundle your homeowner’s insurance policy. Moreover, insurers offer discounts to customers based on their age, military service, superior grades for students, and whether your car has certain types of safety and security equipment.

4. Take a driver training course. Drivers who have one or two tickets and have had that information reported to their insurance company pay a premium for their insurance. However, if you complete an authorized driver training program, your state may eliminate points, saving you money on your car insurance. For example, in Florida drivers may take an approved course no more than once per year and no more than five times in a lifetime. But that course may only be helpful if you have multiple non-criminal driving offenses within a short time, such as in 18 months. “In the event of things like an accident, there is no point in opting for driver school (unless the person already has a problem with points on his or her license) as the accident will be known to the insurer and will be surcharged, regardless of no offense being shown on the driver’s motor vehicle record. Also, if multiple offenses occurred in conjunction with the accident in question, there is no need to take school other than for points on the license,” explained Kristofer R. Kirchen, President, Advanced Insurance Managers, LLC in Tampa. In any case, it is at the discretion of your insurer what benefit is derived from a driver training program.

5. Review your accident reports. If you have been in an accident or have points on your record, that information may be working against you. Contact your state’s Department of Motor Vehicles (DMV) and review your driving record. In particular, outdated or wrong information should be identified and removed from your report and an updated copy offered to your insurance company.

6. Raise your deductibles. How much skin do you have in with your car insurance? In other words, how high are your deductibles? The higher the deductible, the greater your share of the insurance risk. When you select a higher deductible, your insurer will lower your rates. So, determine whether the higher deductible is a sufficient risk to offset your potential losses.

7. Claim your carpooling discount. Only a small number of people carpool, but if you regularly trade-off driving with at least one other person who drives hit or her own car, then your insurance company may lower your rate. In particular, your insurer may offer a carpool discount based on lower annual miles driven each year.

Saving Money on Car Insurance

Even if you haven’t added a driver or changed cars recently, a once annual review of your car insurance policy can save you money. With this in mind, examine your two recent policies. If you notice an increase that is greater than the cost of living, then contact your insurer.

And if you are planning to buy a new car or add a driver, contact your insurer for rate quote information first. As a result of that conversation, you may find yourself reconsidering your purchase or asking your insurer for a student discount.

See Also — How Are Insurance Scores Determined?