Are you getting cheap car insurance? This list will help you obtain cheap car insurance - not cheap in terms of quality but easy on your wallet! Get your car insurance policy and compare your savings with this list to see if you are getting all of the savings you are entitled to, or print it out and use it when getting a new policy or obtaining an online car insurance quote.
Top Ways to Change Your Current Car Insurance into Cheap Car Insurance:
Get Theft Devices: Most new cars have theft devices. Some are automatic and some have to be started at the touch of a button, but all usually get discounts on car insurance. Also, some states provide extra discounts for such things as window sketching.
Ask for a Multiple Car Discount: Did you know sometimes insuring two cars can be the same price as insuring one? If not the same price, insuring another car usually does not cost as much as you may think.
If you have two cars, it is very wise to check with your insurance agent, or while obtaining your online insurance quote, to make sure you can get this discount on your car insurance. Also, if you are planning to sell a second car, the cheap car insurance trick would be to keep that car on just liability to get your multiple car discount. Sometimes people are surprised when they call their car insurance company to take a car off of their insurance, only to find that their price did not go down but possibly increased!
Stick With Yearly Policies: Choosing a yearly policy can extend your savings on your car insurance. Purchasing a yearly policy instead of a six month policy gives you a rate that cannot be changed for one year vs. changing every six months.
Look Into Comprehensive Storage Coverage: If you are planning to store your car for any period of time, you can save on your car insurance by only keeping comprehensive coverage during the storage time. Since the car would be stored, it is very unlikely it will get in a collision or need the liability coverage.
Re-Check Your Mileage: This is a great way to get cheap car insurance: If you are really close to the "miles to work" break-off, you may want to check your mileage closely. When your car insurance company or insurance agent asks you "How many miles do you drive to work one way?" this is a crucial question that will designate you into a particular class. Each class can have significant differences in prices.
Look for a Group Discount: Many companies offer a discount on car insurance for being affiliated with certain organizations. These can range from credit unions, college sororities, or just having a certain credit card. Call your service center and ask them for a list of organization affiliations.
Lower Liability, Comprehensive, Collision, or Medical Payments Coverages: Of course, you can lower your basic coverages. Comprehensive and collision are probably the first to look at lowering by increasing your deductibles on your car insurance. Most vehicles that are on bank loans can have up to a $1000 deductible. Next, lowering your liability and medical payments could help, but only if you are having a hard time paying for your premium and is not recommended for general savings.
Make EFT Payments: Many car insurance companies are now charging up to $5.00 or more for mail payments, but sometimes nothing if you choose to have payments automatically deducted. And, sometimes the deductions can come from your credit card, so you don't have to worry if the money will be in your bank account when payment time comes.
Tuesday, September 25, 2007
Safety Insurance Group
Auto insurers can be great businesses to own, as evidenced by the fortune Buffett made buying and holding GEICO. Here's a look at the unique story of Safety Insurance Group (SAFT).
Safety has about 11% share of the Massachusetts automobile insurance market. It has been profitable every year since inception in 1979, with high returns on equity and strong combined ratios in recent years. The company pays a healthy dividend, now yielding 3%. Senior management also owned 7% of the stock at year end '06.
Despite a history of market leadership and profitability, SAFT shares are trading at 5.1 times trailing earnings, 1.05 times book value, and about 41% below their 52 week high. These numbers make the stock suspiciously cheap.
I need to do some more research before I can state with confidence why the valuation is so low, but my guess is that the unusually onerous regulatory environment in Massachusetts is to blame. Safety can neither choose the risks it takes nor how to price those risks.
Some of the regulations Massachusetts has in place include a "take all comers" policy which prohibits insures from denying coverage based on an applicant's driving record or other underwriting criteria.
You might think that insurers would be allowed offset the "take all comers" risk through shrewd product pricing, but that's not the case. The State Commissioner of Insurance sets the premiums which insurance companies are obligated to use. Effective April of this year, rates will be decreased 11.7%. This follows a decrease of 8.7% in 2006 and a decrease of 1.7% in 2005. That's right--decrease.
Not surprisingly, lowered premiums have put profits under pressure. Net income for 4th quarter 2006 and 1st quarter 2007 were below the comparable prior year quarters. That said, Safety still managed to increase book value by over 25% in 2006 and maintain profitability and market leadership.
It seems the company does a decent job of navigating some tough waters--waters few others choose to swim. Safety's 10K reports, "Many large national private passenger automobile insurance writers, such as State Farm, Allstate, Progressive, Berkshire Hathaway [GEICO], and Farmers, write very little or no private passenger automobile insurance business in Massachusetts." I suppose one can debate whether this is a pro (entrenched leadership, less competition) or con (indication of market's unattractiveness) for Safety's stock.
My goal here is to highlight an interesting story and not to make a stock recommendation. I'm undecided myself. Whether or not five times earnings and a hair over book value make it worthwhile to own a Massachusetts auto insurer is a tough call. If you have any comments that can help flesh out the SAFT story, please post.
Safety has about 11% share of the Massachusetts automobile insurance market. It has been profitable every year since inception in 1979, with high returns on equity and strong combined ratios in recent years. The company pays a healthy dividend, now yielding 3%. Senior management also owned 7% of the stock at year end '06.
Despite a history of market leadership and profitability, SAFT shares are trading at 5.1 times trailing earnings, 1.05 times book value, and about 41% below their 52 week high. These numbers make the stock suspiciously cheap.
I need to do some more research before I can state with confidence why the valuation is so low, but my guess is that the unusually onerous regulatory environment in Massachusetts is to blame. Safety can neither choose the risks it takes nor how to price those risks.
Some of the regulations Massachusetts has in place include a "take all comers" policy which prohibits insures from denying coverage based on an applicant's driving record or other underwriting criteria.
You might think that insurers would be allowed offset the "take all comers" risk through shrewd product pricing, but that's not the case. The State Commissioner of Insurance sets the premiums which insurance companies are obligated to use. Effective April of this year, rates will be decreased 11.7%. This follows a decrease of 8.7% in 2006 and a decrease of 1.7% in 2005. That's right--decrease.
Not surprisingly, lowered premiums have put profits under pressure. Net income for 4th quarter 2006 and 1st quarter 2007 were below the comparable prior year quarters. That said, Safety still managed to increase book value by over 25% in 2006 and maintain profitability and market leadership.
It seems the company does a decent job of navigating some tough waters--waters few others choose to swim. Safety's 10K reports, "Many large national private passenger automobile insurance writers, such as State Farm, Allstate, Progressive, Berkshire Hathaway [GEICO], and Farmers, write very little or no private passenger automobile insurance business in Massachusetts." I suppose one can debate whether this is a pro (entrenched leadership, less competition) or con (indication of market's unattractiveness) for Safety's stock.
My goal here is to highlight an interesting story and not to make a stock recommendation. I'm undecided myself. Whether or not five times earnings and a hair over book value make it worthwhile to own a Massachusetts auto insurer is a tough call. If you have any comments that can help flesh out the SAFT story, please post.
Car Insurance Premium
Many factors affect the premium you will pay for auto insurance. Each is a statistically based risk for a specific population. The higher the risk associated with a person, the more he or she is likely to pay for coverage. We have elaborated on some of the risk factors below, but there are numerous others, including driver's gender, miles driven per year, purpose for using the vehicle (commuting to work, using for work, leisure only), etc.
Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
Marital Status
A married person will pay less than a single person with an identical driving record.
You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:
Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your to see if you can get a better score. A better credit score will save on insurance premiums.
Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
Education
A higher education can save on your premiums.
Driving distance to work
Miles driven each year
Years of driving experience
Business use of the vehicle
Whether or not you currently have auto insurance and how high are your limits
Theft protection devices (often results in discounts)
Multiple cars and drivers (another opportunity for discounts)
What can I do right now to make sure I have the lowest premium?
Shop around and compare quotes from different insurers. CarInsurance.com puts many insurance companies on one site so you can compare them in one place. Carriers base their premiums on their claims experiences, which naturally differ. One company may see your area as a higher risk than others may. Another may charge more because of your occupation. Shopping at makes it easier because you can quickly see multiple companies and their rates for your particular situation. Where do I go for quotes?
One stop can take care of it all. Go to where you can receive multiple quotes, pick the best price, and then purchase. Get covered immediately on-line or over the phone. It REALLY is the easiest way to purchase car insurance. Enter your zip code above.
Customer Said:
Easier than going to an agency....faster too!
Shannon K.
Holiday, FL
Thank you for reading about factors that affect your car insurance premium... Please see if we can save you money with a car insurance quote!
Disclaimer: This article is for information purposes. It should not be interpreted as a recommendation to buy or sell any insurance product, or to provide financial or legal advice. This information is provided for information purposes only.
Articles written by CarInsurance.com have a copyright and cannot be reproduced or republished in any way or form without the written consent from CarInsurance.com. You may use our RSS feed with an active link to our site.
Age
Statistically, drivers under the age of 25 are at greater risk of being in an accident than those over age 25. Drivers between the ages of 50 and 65 generally have the safest records.
Gender
Women are statistically safer drivers, but that trend is changing as more female drivers get on the road.
Marital Status
A married person will pay less than a single person with an identical driving record.
You can think about these factors and determine what you can do to change them in your situation. You may be able to save on insurance based upon these decisions:
Geography
Where you live makes a difference. Folks living in areas with little or no traffic are likely to spend less on insurance than those living in congested cities or suburbs because areas with a lot of traffic tend to see more accidents. Some neighborhoods also have a higher rate of vehicle thefts, which can result in a higher premium.
Driving Violations
Having an accident or moving violations on your record (speeding tickets, DWI, reckless driving, etc.) put you at a higher risk for accidents and will likely mean a higher premium. Some insurance companies will penalize you for your record for as many as five years from when the incident occurred. However, keep in mind, as your record improves, your premium will get lower.
Vehicle Type
A cheap car will cost less to insure than that status symbol SUV sitting on 24" rims.
Accident Claims
A driving record that is clean and free of accidents will hold far better for you than lots of tickets and/or accidents.
Credit Rating
Many insurance companies view having a poor, or even no credit history as suggestive of higher risk and thus, charge you a higher premium. Monitor your to see if you can get a better score. A better credit score will save on insurance premiums.
Occupation
Insurers have statistically found a correlation between your occupation and risk. For instance, a newspaper delivery person is most likely a higher risk than the personal banker sitting at their desk all day.
Education
A higher education can save on your premiums.
Driving distance to work
Miles driven each year
Years of driving experience
Business use of the vehicle
Whether or not you currently have auto insurance and how high are your limits
Theft protection devices (often results in discounts)
Multiple cars and drivers (another opportunity for discounts)
What can I do right now to make sure I have the lowest premium?
Shop around and compare quotes from different insurers. CarInsurance.com puts many insurance companies on one site so you can compare them in one place. Carriers base their premiums on their claims experiences, which naturally differ. One company may see your area as a higher risk than others may. Another may charge more because of your occupation. Shopping at makes it easier because you can quickly see multiple companies and their rates for your particular situation. Where do I go for quotes?
One stop can take care of it all. Go to where you can receive multiple quotes, pick the best price, and then purchase. Get covered immediately on-line or over the phone. It REALLY is the easiest way to purchase car insurance. Enter your zip code above.
Customer Said:
Easier than going to an agency....faster too!
Shannon K.
Holiday, FL
Thank you for reading about factors that affect your car insurance premium... Please see if we can save you money with a car insurance quote!
Disclaimer: This article is for information purposes. It should not be interpreted as a recommendation to buy or sell any insurance product, or to provide financial or legal advice. This information is provided for information purposes only.
Articles written by CarInsurance.com have a copyright and cannot be reproduced or republished in any way or form without the written consent from CarInsurance.com. You may use our RSS feed with an active link to our site.
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