Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and the likelihood of theft,” answers Selective`s John Marchioni. Remember to avoid shopping by price alone. “You want an agent and a company that answer your questions and handle claims fairly and efficiently,” emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.

“Be sure to cancel your old policy,” suggests PCI`s Dan Kummer. “Do it the same day, but don`t cancel your old policy until you`ve lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without insurance.” One last thought from Kummer on the subject: “Most auto insurers specify in your contract that you can terminate your policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that over the phone.

“Generally, most companies will give you the ability to pay over time, but that comes at a price,” says Kummer. “Your payment could increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up.”

If you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a speeding ticket on your record. You can control the other half of your premium which covers damage or loss to your vehicle, comprehensive and collision coverage.”

“In most states,” Snyder reports, “there are hundreds of insurers competing for business, so it`s possible to save hundreds of dollars by obtaining quotes from different auto insurance providers.” Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your insurance provider to get more than one quote. “It pays you to shop around, especially if you feel you`ve been paying too much.”

“Many insurers will give you a discount if you buy two or more types of insurance from them, for example auto and home insurance,” confirms John Marchioni, senior vice president of Personal Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni: “Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices.”

Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured motorist coverages means “you can collect from more than one of your auto insurance policies. Most states prohibit this practice, but there are about 19 states that either allow stacking or don’t address the issue either through legislation or litigation,” according to Kummer, director of personal insurance for the Property Casualty Insurers Association of America.

Some of the main objections will always revolve around privacy. While the legislation and counter-proposal in California currently revolve around only mileage tracking, eventually most of these devices will contain GPS technology, allowing insurance companies to not only track how far and how fast you’ve traveled, but also where and when. These are all risk factors determining your premium.

For some people, this level of transparency and disclosure is totally unacceptable, and not worth any amount of insurance savings. For others, with nothing to hide, paying less for car insurance might prove very tempting indeed.

Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated points of auto insurance.

Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For example, Snyder notes that half of your auto insurance bill covers liability and “that has to do with how you are going to use the vehicle, such as for commuting to work and your driving record.

While the MyRate program differs from the California proposal in that it tracks more than just mileage, these additional factors relating to the driver’s behavior are reported back to the insurance company and are part of an overall assessment and combine to either lower rates—or raise them.

Pay-as-you-drive insurance is best suited for low-mileage drivers. If you drive more miles than you have reported to your company in the past, you may find your premiums increasing, regardless of your driving habits.

Currently rates are based on the information actually reported to the companies by the drivers. Most drivers estimate annual mileage, and few realize that there may already be potential discounts available if they drive less than 10,000 miles each year. Sometimes these potential savings don’t come up until drivers compare rates between auto insurance companies.

Environment Defense, a nonprofit environmental group, estimates that pay-as-you-drive insurance could reduce driving and congestion by 10% to 12%, while reducing air pollution and other negative environmental impact from vehicles. With fewer cars on the road, the number of accidents and injuries could also fall.

The LA Times reported that most insurance companies were generally in favor of the plan. Annual mileage is an important factor in setting insurance premiums: fewer miles driven means fewer accidents and lower rates. Insurance companies are also intrigued by the fascinating—and potentially disturbing—additional information that some of the electronic monitoring devices can report, helping those companies determine which driver are more likely to have accidents—and who should pay more for insurance.

Progressive’s MyRate program is a usage-based insurance program that uses an installed device similar to that of the pay-as-you-drive proposal, though their device and program are more sophisticated. Their device uses cell phone technology to call a central computer to report driving information to the company. It’s being tested in several states before a national rollout, once regulatory approval is attained.

Richard Hutchinson, Progressive’s MyRate General Manager, said that the program was designed “…primarily for lower-risk drivers who are consistent and safe. They drive at low risk times of day and they keep alert for others on the road. They don’t make fast lane changes or follow too closely behind other drivers so they don’t have to over-react or slam on the brakes.”

The next big thing in car insurance could be a small device placed in your vehicle that tracks your driving habits and determines just how safe a driver you are. In California, mileage-based insurance savings could be worth an average of $276 per vehicle for the majority of state households (according to a report by the Brookings Institution) but many are concerned about the potential loss of privacy.

Proposition 103 requires insurers to set their insurance rates based upon specific factors, including the number of miles driven each year. Assembly Bill 2800, which passed in the California Senate Appropriations Committee, allows insurers to more accurately base premiums using mileage information.

Consumer advocacy group Consumer Watchdog expressed concerns around the bill, stating that the bill “…would force drivers to choose between fair insurance rates and protecting their privacy.”

Poizner’s proposal would maintain the incentive of mileage-based insurance while giving consumers more freedom to choose exactly how the information would be gathered.

The practice of giving lower insurance rates to people with more education and higher paying jobs recently was exposed to the public by people like Eric Poe. Poe is the Vice President of NJ Citizens United Reciprocal Exchange (NJCURE), a non-profit organization which also provides auto insurance. Poe found that blue collar workers or “unskilled” laborers were being charged as much as 40 percent more than doctors, teachers and other highly educated workers, regardless of driving history.

Poe has also revealed that other insurers are either already practicing this policy in New Jersey or are considering it. Auto insurer Liberty Mutual utilizes education in making decisions on insurance rates for their clients in New Jersey. Allstate Insurance is also looking into factors such as education when billing their clients.

The results and fallout from this controversy remain to be seen but the whole country is watching. Auto insurance companies such as Geico are avoiding the controversy but many say that since the practice is not illegal they are not committing any infraction. Critics have asked Geico for data from studies they’ve done regarding the correlation between driving and education but so far no information has been released.

A big source of savings is to insure your cars with the same company that insures your house. Make sure you ask if combined coverage is available. This will lower your payments on your car insurance and make your homeowner’s policy cheaper too.
It’s also important to make sure you are getting a “renewal” discount that many car insurance companies offer. This is a discount given to people who have been with the same insurance company for an extended period of time.

If you have carried insurance with a company for several years, and not had an accident, your insurance company likes you. Think about it. You paid them a lot of money and they didn’t have to do anything except send you bills and cash your checks.

True, they were ready to do something if you got in an accident. But you didn’t get into an accident so they’re happy and want to continue their relationship with you. A renewal discount is a good incentive to urge you to return. And it’s a good reason for you to stay with them.

Something else that you need to keep in mind while shopping for insurance is that there are providers who will offer special discounts and rates if you ask for them. While you are weighing all of your options and considering all of your choices, ask the local agencies that you are considering if they offer any special rates or discounts. In an attempt to be competitive, and to make sure that you choose them as your insurance provider, most insurance companies will discount your rate, or offer you a special deal.

You should also make sure that you are obtaining the right kind of insurance for your situation. For example, there are special insurance plans designated for young or new drivers in order to offer them discounted rates. Additionally, vehicles that are older than fifteen years may qualify for antique car insurance, which entails a discounted rate for cars which are appreciating in value rather than depreciating as a normal vehicle would.

Just because an insurance company offers you an extremely low quote, this does not mean it is the best available insurance for your situation. The basic car insurance policy offered by the Automobile Insurance Cost Reduction Act is proof of this, because even though the insurance quote seems great, the coverage is not really worth the price that you pay for it.

In addition to price, there are some other factors that you should consider when you begin to shop around for insurance providers. There are a large number of different insurance companies and agents available on the internet, each competing to give you the best possible quote for your automobile insurance.

Many of these insurance companies have offices in various states, but they may not have a local office in New Jersey. What this means, is that if you ever have questions or concerns pertaining to your insurance policy, you will not have a local insurance provider to turn to in order to address these problems.