Sign up for our FREE Monthly Email Newsletter
In addition to keeping in the financial know, you may be interested in checking your credit score and report.
¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.
²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.
³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.
4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.
Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.
When insurance companies consider your application for auto insurance or a request to lower your premiums, they look at a variety of factors, including your driving record, your credit score, and whether you’ve purchased several insurance policies from the same company.
Here are some things you can do to increase your chance of saving money on your auto insurance premiums.
1. Review your policy.
How long have you had the same insurance carrier without requesting a policy review?
The insurance world has been experiencing a soft market for several years, which means pricing has been extremely competitive – that’s good news if you’re in the market to buy a policy. A carrier may occasionally review its guidelines and revamp its pricing to compete for customers.
Carriers are also constantly checking their statistics to see where most claims occur. Your insurance carrier may expand its tier structure to allow more flexibility and forgiveness for incidents and accidents. It’s possible your policy can be re-tiered depending on your motor vehicle record (or MVR—see below).
Your insurance company may have softened its credit score requirements after the Great Recession, so if you haven’t requested a policy review in the past year, call your insurance carrier and do it now.
2. Keep your MVR clean.
Have you had an accident (or more than one)? A ticket (or more than one)?
The “more than one” represents a potential frequency issue that could make your carrier increase your rates or even decide not to renew your account. (If your policy isn’t renewed, remember: it isn’t personal—it’s just the business.) If the agent can’t negotiate with the underwriter to reconsider its decision, you’ll have to move on to a different carrier who may be more forgiving.
How can you avoid this? Treat your MVR with respect—period. Remember that it’s a part of your financial profile that has expensive consequences. If you have a handful of speeding tickets, it will definitely affect the price of your auto insurance policy.
Not-at-fault accidents do occur, but frequent not-at-fault accidents can also cause your auto insurance premiums to skyrocket. Sometimes an agent can help explain what happened with a particular accident and negotiate with the underwriter. But ultimately, underwriters will use actuarial data on file to profile drivers based on trends of at-fault and not-at-fault accidents.
So keep your driving record clean, and you’ll pay a lot less for your auto insurance coverage.
3. Take a defensive driving course.
If your insurance carrier decides to raise your insurance premium or not to renew your policy, you’ve got to shop for a new insurance company.
To help keep the costs down, enroll in a defensive driving course. It takes time and could cost around $50 (unless you can get a group rate), but you could receive a 10 percent discount on the physical damage premium of your policy for three years. That’s worth a lot more than $50.
4. See if you can get a multi-car discount.
If your family has multiple cars on multiple policies, you may be missing out on a multi-car discount. Review your policies with your agent to see if you can combine plans and reduce your premium.
5. Improve your credit score.
Every insurance carrier will pull a copy of your credit score and use it to determine an insurance score, which will in turn help determine how much you have to pay for your policy.
It costs an insurance company money to collect what’s known as “earned premium” (the premium due while a policy is in force), so the better the credit score, the lower the insurance premium. The lower your credit score, the harder it is for a company to collect the earned premium and the more it costs them to have that policy on the books.
In short, every insurance company wants customers who have a perfect record of paying their bills. In practice, a credit score is used to figure out how much risk you represent for the insurance carrier.
6. Package your auto insurance policy with homeowner’s and umbrella policies.
Got a great deal on your auto insurance policy? Test it. Insurance carriers are offering terrific deals if you combine your auto insurance, homeowner’s, and umbrella liability policies. When you call your carrier for your policy review, discuss what kind of account discounts the company offers.
7. Raise your deductible.
Can you afford a higher deductible? Raising it can save you a considerable amount on your auto insurance premium. Carriers’ rates may be more favorable if you have $250,000 per person/$500,000 per accident versus $100,000 per person/$300,000 per accident. You should consider higher limits regardless if your net worth warrants it.
We see our customers save money every day on their policies just by following the good practices on this list. Have you checked in with your insurance carrier lately? Let me know if you’re able to secure a discount on your auto insurance policy by following some of the suggestions on this list.
Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.
Follow Linda on Twitter.
Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.