Save money on auto insurance

Auto premiums can go up even if you don’t have a claim. When the cost of auto repairs, medical treatment, fraud, theft and lawsuits increase, insurance companies pay more for claims and collect more in premiums. Who pays for these increases? We all do.

Drive safely!  
Motorists can generate savings on insurance by maintaining a safe driving record. Surcharges normally associated with at-fault accidents and serious violations can be avoided. Additionally, many insurance companies offer other types of discounts, though they vary from state to state.

 Discounts are typically available for…

  • Driver training. For young drivers who have completed driver training courses.
  • Good students. Limited to high school or full-time college students over the age of 16, and usually contingent on maintaining a B or better grade average.
  • Resident students. Offered by some companies when a family member is a resident student, without a car, at a college more than 100 miles from home.
  • Multi-cars. Usually available to those who insure two or more cars with the same company.
  • Air bags. Available from some companies to drivers of cars with air bags.
  • Anti-theft devices. Available to customers whose vehicles are equipped with alarms or disabling devices that reduce exposure to theft.
  • Non-drinker and non-smokers. These are becoming increasingly popular with consumers.
  • Multiple policies. Available by some companies to those with more than one policy (i.e. auto, home, life, health) with the same company.
  • Commuter or carpools. If you drive just a few miles, take public transportation or carpool to work, ask if a mileage discount is available.

More ways to save on auto insurance…

  • Shop around. Check with several insurance companies and agents before making a final decision. Chances are that you will find differences in service as well as premiums. Also, ask questions regarding their claims handling process, how long they have been in business and their financial stability or rating.
  • Increase deductibles. You can reduce your premiums if you shoulder more of the risk. By increasing your deductible, you are responsible for small losses, not your insurer. Increasing your deductibles could reduce collision and other than collision premiums.
  • Choose the right car. Before you buy a car, ask your agent or company representative how the premiums for the vehicle you want compare with those of similar models. Premiums are higher for most luxury and sport models because of higher accident repair costs and auto theft experience.
  • Consider eliminating coverage.  Consider dropping collision and/or comprehensive coverage if your car costs more to insure than what you would collect after an accident. Keep liability coverage to protect your assets and comply with Nevada’s financial responsibility law.

Teen driving

Age is one of the key variables involved in determining auto insurance premiums. After a driver turns 30, age has less effect on premiums.

According to the U.S. Department of Transportation, teenagers are involved in a disproportionately high number of traffic accidents. Immaturity and lack of driving experience are the main reasons. As a group, teens are more willing to take risks and less likely to use safety belts.

The combination of inexperience and immaturity among 16 year-old drivers produces the highest percentage of crashes involving speeding, single-vehicle crashes, driver error, and the highest vehicle occupancy.

Six percent of all drivers are under 20, yet they accounted for 39 percent of accidents in 2009.  About 40 percent of teenage fatalities occur at night, especially weekend nights, and 28 percent of teen drivers killed in accidents had been drinking.  Three-fourths of the teen passengers killed in crashes were in cars driven by other teens.

Of teenage drivers, death rates are highest among males, and most accidents occur on weekends. Nighttime fatal crashes involving teenage drivers are about four times the rate for adult drivers.

Graduated licensing

A graduated licensing program helps young drivers between the ages of 15 and 18 improve their driving skills and habits before receiving full driving privileges.  In a comprehensive program, teens spend at least six months learning and practicing with a licensed driver, with limits on the number and age of passengers and other restrictions. Most states have experienced tremendous success in lowering teen crash numbers after adopting graduating licensing programs, with decreases of up to 32 percent reported.

Nevada teens are required to pass a 30-hour state-approved driver education course in a classroom or online as well as 50 hours of behind-the-wheel driving experience. 

Tips to help keep auto insurance premiums down for young drivers…

  • It is usually cheaper to add young drivers and their vehicles to the family’s auto insurance policy rather than buying a separate one. But doing so can leave family assets open to lawsuits if your young driver is found at-fault in an accident and damages exceed your policy limits.
  • Consider higher auto liability insurance limits, especially beyond the state’s minimum limits. To help defray the additional premium, consider higher deductibles or paying for minor fender benders out of pocket.
  • Students with good grades are better drivers. If a student keeps the vehicle at school, it may be in a lower risk location, resulting in a slight reduction in premiums.
  • Parents should take an active role in driving education.

Older drivers

In 2010, there were 22.3 million licensed drivers who were 70 or older, representing 80 percent of that population segment and 11 percent of drivers of all ages.  Seniors drive fewer miles, but as baby boomers age, they keep their licenses longer and make up a larger proportion of the population than in past years.

The number of licensed drivers 70 and older increased 26 percent between 1997 and 2010.  Older drivers have higher rates of fatal crashes than any other group except young drivers, and the highest motor vehicle crash death rate is among males 85 years and older.

Nevada law specifies that age alone is not a justification for reexamination. Applicants for mail renewal must include a medical report if they are 70 or older.

Sources:  Insurance Institute for Highway Safety, Federal Highway Administration, U.S. Department of Transportation, Nevada Department of Motor Vehicles