Drivers Tackling High Insurance Rates

Auto insurance rates continue to rise, adding pressure to cash-strapped consumers.

Some drivers are reportedly letting their car insurance policies lapse, by either not renewing on time or failing to pay their bills, according to Insurance.com. In light of this worrisome trend, Insurance.com is urging drivers to explore savings opportunities and payment options—rather than go without car insurance.

Insurance.com offers these ideas for protecting your rates and your credit.

1. Avoid a Lapse in Coverage—Never ignore you car insurance bill. Driving without insurance is against the law and you’ll be personally liable if you have an accident. And, a short-term decision like letting your policy lapse will have big, long-term consequences—your rates may be 25 to 50% higher.

2. Explore Payment Options—Many carriers offer discounts of up to 15% if you pay your bill all at once. If you’re not able to afford that lump sum payment, ask your company about monthly payment plans. There may be a small fee for a payment plan, but some carriers will waive that fee if you elect to pay by Electronic Funds Transfer.

3. Make a Partial Payment—If you cannot afford to pay your entire insurance bill, talk to your company about making a partial payment when your bill is due. Some companies will continue your coverage, as long as you pay something—but others may require full payment. There’s no harm in asking if a smaller payment will keep your policy in force.

4. Shop for a New Policy—If you have not shopped for car insurance in several years, now may be a good time to compare rates. New customers reported an average annual savings of $595 when they shopped and switched carriers at Insurance.com.

5. Protect Your Credit —Missed payments can lower your credit rating, making it more expensive to get car insurance coverage in the future. If a credit card company or department store offers deferred billing, look carefully at the terms, so that you’re not in deeper debt in the New Year.

For those who are resolving to save more money in the New Year, auto insurance policies can be an easy—but often overlooked—source for savings. Some discounts include:

• Low Mileage discounts if you drive less than 10,000 miles each year.
• Hybrid discounts if you’ve recently purchased an eco-friendly car.
• Early shopping discounts if you renew two weeks before your policy expires.
• “Good student” discounts for high school and college students with a B or better average.
• Defensive driving course discount if you’ve taken a class within 3 years.

Insurance.com’s 3^rd Quarter RateWatch for Car Insurance found that the lowest car insurance quotes, on average, were up 3% over the previous quarter, rising from $1,893 per year to $1,949 per year.