Seven scenarios that may affect your car insurance

Kathryn Hawkins

Your insurance agent can’t read your mind, and he or she may not always realize when your circumstances change. In many cases, you could be eligible for a lower premium on your car insurance or you might want to adjust your coverage levels. Here are seven situations that warrant checking in with your agent.

  1. You’ve added better security features on your car. If you’ve just invested in a high-tech security system for your vehicle, “you absolutely deserve a 5 to 10 percent reduction on your premiums,” says Ryan Hanley, an insurance broker with The Murray Group Insurance Services Inc. in Albany, N.Y. Some carriers also may reduce your premiums if you start parking your car in a locked garage rather than on the street.
  2. You’re not driving as many miles per day as you used to. If you’ve just been laid off or gotten a job closer to home, your daily mileage is likely to drop. “If your driving habits change, let your agent know so that he or she can adjust" how your rates are set, says Mike Coleman, a State Farm agent in Lineville, Ala.
  3. You haven’t filed a claim for several years. Most states govern how many years an insurance claim will affect a consumer’s rates. This time is known as an “experience period” and typically is about three years. If your state has no guidelines, insurance carriers may be able to figure driving records into your rates for up to a decade. Carriers review only a percentage of their records each year, so even if a claim is no longer within your experience period, “they may not review your account and your premiums may not come down,” Hanley says. If you’ve filed a claim in the past few years, be proactive in determining when your experience period ends so that you know when you’re eligible for a rate reduction; it may not happen automatically.
  4. Your living situation has changed. If you previously lived in student housing with a group of roommates and have just moved to your own apartment, call your agent. Because the number of people who might be likely to drive your car has dropped, your premium could go down, Hanley says. Likewise, if you get married, your spouse will be part of the rate-setting process, and you'll generally get a discount. “Anytime your living situation changes, it’s good to contact your agent and pick his brain,” Hanley says. “In a lot of cases, it can help lower rates.”
  5. Your car has fallen substantially in value. Even as your car ages and becomes less valuable, your agent generally won’t be able to lower your premium. “That’s because if it’s involved in an accident, the company’s typically on the hook for new parts,” Coleman says. However, after a certain point -- typically seven to 10 years -- you might consider dropping collision coverage on the car. “If you’re paying $700 out of pocket in premiums and deductibles when your car’s only worth $4,000, that $700 may not be worth it,” Hanley says.
  6. You’ve purchased additional policies with the same agency. In most cases, your insurance agent automatically will give you a discount when you add a new policy, but if he doesn’t, always check in to find out what you’re eligible for. “If you buy a home insurance policy, you want to make sure that your agent re-rates you,” Hanley says. By the same token, if you buy insurance for a second car, you’ll be entitled to a premium reduction.
  7. You auto-renew your policy every year without doing comparison shopping. “I tell my customers to review their accounts on a yearly basis,” Hanley says. “Rates go up and down each year, some by half a percent and some by 10 percent.” If you simply buy the same policy year after year, your rates will only go up. Work with an insurance broker or conduct independent research to make sure you’re getting good value for your money.

No matter how your circumstances might change, be proactive in asking your insurance agent what he or she can do to negotiate better car insurance rates.

“Contrary to popular belief, most agents don’t look for ways to stick it to you,” Coleman says. “We know happy clients will stick with us longer and tell more people. Most agents will welcome the opportunity to help you find all the discounts they can.”

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