Reviewing Auto Insurance Policy May Help Reduce Premiums

02/25/2010

Massive recalls by Toyota Motor Corporation may serve as a reminder for consumers to review the safety of their car - and the auto insurance protecting it.

A recent report by the Associated Press suggested ways to get a better deal on insurance while making sure that all drivers are covered. First, a consumer should consider their geographical location, as many states have different insurance rules. Credit-scoring is used by companies in some states to determine a consumer's risk and likelihood to file a claim.

Driving safely can also help avoid high insurance scores associated with car accidents. The report recommended driving less and researching vehicles before making a purchase. Shopping around can also help ensure that consumers make the most of their insurance costs.

"Keep in mind, many companies offer a range of discounts," the report said. "For example, many will charge less if you insure your home and car with them. Some also offer discounts when you insure more than one car."

Studies have shown a strong correlation between credit scores and loss ratio, the amount of claims filed relative to dollars collected, according to the Insurance Information Institute. Consumers may request one credit report from each of the three credit scores during a 12-month period.

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