How Fast is that Red Car?
Although no one keeps official statistics, stories and anecdotes help to reinforce the urban legend about red cars getting more tickets and being more expensive to insure. However, according to the urban legends, there is no evidence to support these ideas. The lack of statistics makes it impossible to say which color cars get more tickets, but police and insurance companies deny any link between red cars and an increase in tickets and accidents.

In general, driving the speed limit is always a good idea, no matter what color car you drive. If you keep your red car at or near the limit, your chances of getting a ticket are much smaller. In fact, they are probably the same as the guy next to you driving the speed limit in his purple car.

Color and Personality
It may not affect the number of tickets you receive, but what does your car color say about your personality? CAA Magazine, a publication of the Canadian Automobile Association, looked at the psychology behind your choice of car color. According to their analysis, the color red supposedly signifies you have a “need for speed,” a theory snopes.com says adds to the perception that red cars receive more tickets.

The Color of Money
What about car insurance rates? Does your car insurance company use color to determine your premium? The answer is no.

Some people have suggested that insurers use the Vehicle Identification Number (VIN) to determine the car color and use that information, in part, to set the rate for each car. But car color is not one of the details stored in a VIN. Unless your car insurance company asks you, they really have no idea what color your car is. It has no effect on your rate.

If car color doesn’t matter, what types of things do insurers look at when considering your car? Factors like year, make, model, car body type, and engine size are taken into consideration. The Highway Loss Data Institute (HLDI) maintains reports on insurance losses for different makes and models. Some insurers may use this information to adjust the rate they quote you. However, things such as your driving record and ZIP code are often more important to your rate than the type of car you drive. Of course, your rate quote may be higher if your car is expensive, or lower if it has important safety features like air bags.

If you keep your red car near the speed limit, stop at red lights, yield to oncoming traffic, and make your cell phone calls when you are stopped, you will probably keep your rates low regardless of your car’s color.

So, if you want that red car, go right ahead and get it.

No matter what color car you have, our car insurance rate quote tool can help you find your best rate on car insurance.

The color of my car determines my auto insurance rate. My credit score has no bearing on my insurance premium. I have auto insurance coverage so my new car is already covered… right?

Maybe not! Below is a list of fallacies many car owners believe and drive by each day. The truth just might make you change course.

Myth #10 “No-fault insurance means it’s not my fault!”
False. No-fault insurance means that your auto insurance company pays for your damages regardless of who’s at fault.

Myth #9 “The color of my car affects my auto insurance rate.”
False. The color of your car does not impact your car insurance rate. What does influence your rate is your vehicle’s year, make, model, body type, and engine size, along with your credit history and driving record.

Myth #8 “If I lend my car to a friend and that friend is in an accident, his or her insurance company will pay for the damages… right?”

False. Your car, your responsibility! And guess what, even though you weren’t present at the time of the accident, you still will receive a mark on your insurance record and your insurance premium could possibly go up.

Myth #7 “My insurance rate is set by the government.”
False. The government does not set your car insurance rate. Where you live, your credit score, marital status and your driving record is what actually affects your premium.

Myth #6 “I recently paid my insurance premium, so the new car I just purchased is covered.”
Not necessarily. Most automobile policies require that the policyholder notify the insurance company or agent within a specified number of days, if indeed coverage is desired for the newly purchased vehicle.

Myth #5 “It’s a fact. Males under the age of 25 pay more for auto insurance.”
True and False. Males under 25 years old can potentially pay more for car insurance than female drivers. However, across the board, teenagers and seniors pay more for auto insurance, in large part because these age groups are typically involved in more automobile accidents.

Myth #4 “My credit score has no effect on my insurance rate.”
False. Your credit score really does matter! Many Insurance companies take your credit score into consideration when deciding to increase or renew your auto insurance coverage.

Myth #3 “Even without comprehensive coverage, I’m still covered for theft, windstorms, hail and deer accidents.”
False. Many drivers believe that if they only purchase collision insurance-which covers damage to your car resulting from driving accidents–that they will also be covered for incidents that involve vandalism, hail, animal accidents and fires. That simply is not true. You need to purchase both collision and comprehensive coverage in order to fully protect your vehicle from all of these situations.

Myth #2 “My personal auto insurance covers both my personal and business use of my car.”
False. If you occasionally use your personal car for business purposes such as transporting clients, going to and from meetings or hauling business equipment, then you will more than likely need to extend your personal car insurance to cover your business use as well. Plus, if your employees use their car while working for you, you will want to also obtain a separate non-owned car insurance policy.

Myth #1 “I’ve never had or been involved in a car accident, so I don’t need automobile insurance.”
False. Some drivers are lucky enough never to have been or to be involved in an accident. However, car insurance is the best protection you can have in the event of an automobile accident. It’s also a legal issue. You are legally required to have some form of auto insurance, and failing to do so carries some fairly strict punishments.

To find an auto insurance plan that fits your needs and budget, get free auto insurance rate quotes. You’ll be able to compare car insurance rates from different insurance providers, helping you save time and money on your auto insurance.

For example, consider these scenarios:

• Two years ago, you were unemployed for six months. Before you could find a new job, you fell behind on several credit card payments. Now your auto insurance rates are going up, even though you’ve never filed a claim against your policy.
• You’ve always paid your bills on time, and you’ve always paid cash instead of applying for credit. Why could this be a problem? Similar to when you apply for a mortgage or credit card, your lack of credit history means you’re an unknown quantity – there is no history of monthly credit card payments.

Many people believe that only their driving record is important, but that’s simply not the case. The majority of auto insurance companies consider credit to be a very important rating variable.

What’s the score here?
Insurers have always used various criteria to determine who to insure and at what rates. For example, if you’re applying for auto insurance, your insurer might consider your age, driving record, make and model of your car, and how many insurance claims you’ve filed in the past. But within the last decade, insurance companies have also begun using credit information as an additional factor to help predict which persons pose more risk. Insurers believe that the healthier your credit history, the less likely you are to file a claim against your auto or homeowners insurance policy. And the more likely you are to pay your insurance premium payments.

If your credit history (along with other factors considered) suggests that you are likely to be a responsible driver, you may be offered a lower premium. But if your credit history is tarnished–or if you have little or no credit history–you may pay higher premiums for the coverage you’re offered. You may even be denied coverage altogether.

How you can improve the score
If you’re denied insurance coverage because of your credit history, the federal Fair Credit Reporting Act allows you to order a free copy of your credit report from the bureau used by the auto insurance company who denied you. If you feel the information provided to the credit bureau is incorrect, you can dispute it.

If you’ve been turned down for insurance, this may feel like too little, too late. But if your credit history is affecting your ability to get auto or homeowners insurance (or the premiums you’re charged for it), here are a few things you can do:

• Clean up your credit immediately. Pay your bills on time every month, get rid of the high interest credit cards, and don’t spend beyond your means.
• If you don’t have any credit, get some. Your lack of history is what’s hurting you; to the insurance companies, you’re an unknown quantity. Although you don’t want to run up excessive debt, you do want to show that you can use credit responsibly. Use your credit regularly, and always make your monthly payments in a timely fashion.
• Once a year, get copies of your credit report from all three major credit bureaus. (The information contained in one report may not be reflected by the others.) Make sure the information on them all is correct. Dispute any errors with both the creditors and the credit bureaus involved.
• Shop around for insurance. Depending on the insurer, prices for the same coverage can vary substantially.
• Consider higher deductibles to save money. For both homeowners and auto insurance, higher deductibles can lower your premium costs. Just make sure you can cover the deductible should you be faced with a claim.

For now, the use of credit reports is an industry standard. Make your credit work for you by watching it closely. In most cases, you may be rewarded with lower premiums if you do so.

Please note that this description/explanation is intended only as a guideline.

When it comes to auto insurance rates, who you are determines what you pay.

Automobile insurance premiums are based on a large number of factors, some of which you can control, and some of which, alas, are incontrovertible facts of life. Statistically, a sixteen-year old boy with a 300 horsepower sports car in a big city is far more likely to hit something than a 35 year-old married guy driving a minivan around the suburbs.

While you can’t change your age and some other factors, there are things that you can do to keep insurance premiums as low as possible.

Factors you CAN’T change that impact your auto insurance rates: 

• Your age
  Dick Clark and Sophia Loren notwithstanding, aging is unavoidable. And while you may be a mature-looking teen or a youthful octogenarian, the oldest and the youngest drivers are far more likely to have accidents.
• Gender
  Whether it’s the mothering instinct or fewer NASCAR fantasies, women statistically make safer drivers.
• Marital Status
  Ok, you can change this, but there have been no reports of people marrying simply to lower their insurance rates.

Factors you CAN change that impact your auto insurance rates

• Geography
  Where you live matters. For instance, those living in rural America are far less likely to have a collision or a stolen car than those living in a city. But, sometimes even just moving across the street can change your rate.
• Driving violations
  Speeding tickets, running red lights, failure to yield, etc. all count toward your auto insurance rate.
• Your vehicle
  If you must have that cherry red Corvette or the Ferrari Testarossa, be prepared to pay for it. Your insurance premiums will be higher.
• Accident claims
  While you can’t change the past, keeping your slate clean and free of accidents will hold you in better stead than lots of fender benders.
• Credit rating
  That’s right — many insurance companies view having a poor, or even no credit history as suggestive of higher risk.
• Occupation
  A little easier said than done. Believe it or not, insurers have found correlation between your occupation and risk. Makes sense that the pizza delivery guy could be a higher risk!

Other factors that go into determining premiums:

• Miles driven per year
• Distance to work
• Occupation
• Years of driving experience
• Business use of the vehicle
• Whether or not you currently have auto insurance
• Theft protection devices (often results in discounts)
• Multiple cars and drivers (another opportunity for discounts)

Overwhelmed?
It can be more than a bit confusing when trying to decide the best and most affordable coverage for your vehicle. Like anything else, get good advice and comparison shop. With the Web at your fingers, you have all the information and power to get the best deal.

Please note that this description/explanation is intended only as a guideline.

Most people complain about the cost of their auto insurance – hardly surprising, given that a typical policy costs at least several hundred dollars a year. Depending on your age, driving record, and other factors, your annual premium can be significantly more than that. So how can you lower your premium and save yourself money?

If you own a car and drive it, going without insurance is generally not an option. In most states, you are required by law to purchase a minimum amount of liability coverage. And you should probably have more than just the bare minimum if you want to provide yourself with adequate protection. There are steps you can take, however, to reduce your auto insurance costs without having to cancel your policy. Some or all of these steps may be appropriate for you, depending on your circumstances.

Specific ways to save money on auto insurance:  

1. Shop around.
One of your first steps should be to shop around. A particularly good time to investigate your alternatives is when your current policy is about to be up for renewal, especially if you find that your premium has gone up. You may be surprised to learn that auto insurance premiums for the exact same coverage on the same car can vary widely (by hundreds of dollars) between different insurers, even in states that regulate auto insurance rates.

2. Increase your deductible.
For many people, raising the deductible on their auto insurance is a good way to cut the cost of the policy. Sometimes you can reduce your annual premium by 10 percent or more if you increase your deductible from, say, $250 to $500. If you do this, however, make sure you have the financial resources to handle the larger deductible when the time comes.

3. Keep an eye on your credit report.
Your credit history is an important factor for most auto insurance companies. Many studies have shown a correlation between your credit history and the risk to an insurance company. Paying your bills on time and maintaining a good credit history will allow you to enjoy lower auto insurance rates.

4. Drive less.
If you drive less than a certain number of miles in a year (e.g., 7,500), you may qualify for a low-mileage discount. If your insurer offers this discount, try to limit your driving as much as possible. If you commute to work, use public transportation instead of driving. When you go away on vacation, fly or take the train.

5. Don’t use your car for business purposes.
Since work-related driving generally subjects you to higher premiums than pleasure driving, it may be in your best interest to stop using your car for business purposes.

6. Drive more safely.
You may be eligible for a price break on your policy if you maintain a clean driving record for a specified period (usually three years). A clean driving record generally means no accidents, moving violations, drunk driving convictions, etc., during that period. The best way to qualify for the applicable discount is to drive carefully and defensively at all times.

7. Buy a low-profile car.
Cars are rated on a risk scale for auto insurance purposes. In general, sports cars and other high-performance, flashy vehicles are classified as higher risks because they are common targets for thieves and vandals, and because statistically, the people who own them tend to drive more recklessly. If you own such a vehicle, you will likely pay a higher premium than if you owned a station wagon, sedan, or other low-risk vehicle.

8. Move.
If you live in a rural community with little crime and traffic congestion, your premium will generally be lower than if you live in an urban area where your car is more likely to be stolen, vandalized, or involved in an accident. Granted, you shouldn’t move just to cut your auto insurance costs. However, this may be one of many factors in your decision if you’re thinking about relocating from the country to the city.

9. Keep your car in a garage.
Cars parked in garages are less likely to be stolen, vandalized, or struck by other vehicles. Using a garage to store your car may entitle you to a slight premium reduction.

10. Have safety/anti-theft devices installed.
You may receive discounts on your insurance if your car is equipped with one or more of the following options: anti-lock brakes, automatic seat belts, and airbags. Similarly, anti-theft devices such as car alarms and tracking systems (e.g., Lojack) may also get you a discount because they reduce the chances of your car being stolen or vandalized.

11. Inquire about multifamily/multipolicy discounts.
You may receive a discount from your insurance company if you buy more than one type of insurance through that same company (e.g., auto and homeowner’s). A discount may also apply to your auto insurance if you insure multiple cars under the same policy or with the same company.

12. Other discounts
Other discounts may be available if you meet certain criteria. Examples may include discounts for taking a defensive driving course, being a AAA member or staying with the same auto insurance company for a number of years. These discounts vary by company.

Please note that this description/explanation is intended only as a guideline.

Laptop, book money, bean bag chair, TV with DVD player, iPod, cell phone, shower tote and debit card—sounds like your college-bound teen is all set to start school! But are they ready to handle the responsibilities of driving on campus? Sure your teen driver knows how to navigate around your home town, but going to college means driving in an unfamiliar territory—one with more pedestrians, new distractions and new destinations. Auto Insurance and Driving Tips for College-Bound Students and young drivers.

 

Car Check
Check your child’s car from front to back before they leave for school. For instance, make sure the headlights are in working order, the turn signals work, the oil level is good and the tires are inflated properly. These little steps will help ensure a safe trip for your new college student.

Pack a Car Accident Kit
As you pack everything up for school, make sure to include a car accident kit. The kit should include a first aid kit, blanket, flares, flashlight, batteries, jumper cables, pen, paper, emergency contact numbers and proof of insurance.

Locate the Essentials
Once everything is unpacked, go on a little road trip around the college. During your journey, make it a point to find out where the local grocery store, gas station, eateries and all-purpose stores, such as Wal-Mart and Target, are located. This will not only be helpful when you come to visit, but it will also make your child feel more comfortable about navigating around their new home.

Parking on Campus
While on campus, it is wise to check out your son or daughter’s designated parking lot. This will not only help you evaluate the surrounding area, but it will also give you the opportunity to refresh your child on some smart parking tips, such as: always park under a light, avoid overgrown areas, park close to the street or bus stop and be aware of your surroundings.

Campus Driving Conditions
Driving in a new environment can often catch even the best drivers off guard. That’s why it’s important for college students to drive cautiously and remain alert.

Pedestrians
An increase in the number of pedestrians walking around campus and town is always an issue at any university. It’s important to remind your teen driver of these important pedestrian tips:

• Stop for pedestrians crossing at all corners or crosswalks
• Don’t pass a car that has stopped at a crosswalk
• Always yield to pedestrians

Car Theft
Make sure to remind your teen driver to always lock their car doors and never leave valuable items inside their car, such as CDs, iPod or laptops.

Don’t Drink and Drive
Don’t let your child become a statistic. Talk to them about the risks of drinking and driving.

Making the Grade
Many car insurance companies offer a “Good Student” discount to college students who maintain a “B” average or better. Not only does this provide parents with a 10 to 25 percent discount on their auto insurance, but it also gives college students an extra incentive to keep their grades up while away from home.

Roadside Assistance
While your teen driver is away at school you may want to consider purchasing a roadside assistance membership, such as AAA.

Insuring your College Student
If your teen driver is planning on taking your car to college, make sure to notify your car insurance company that your car will be housed at a different location. Depending on where your child is going to school, your auto insurance rate may go up or down.

If your college student is just riding a bike, some car insurance companies offer a “Distant Student” discount. To find the best rate to fit your budget, get free car insurance quotes using our easy application. There, you’ll be able to compare multiple auto insurance rates from top companies, helping you save time and money on your car insurance coverage.

Gas Mileage and Auto Insurance Quotes. The reason most people want a hybrid is because of the great gas mileage they can get. How is this possible? Technology for hybrid autos varies, but higher fuel efficiency is usually accomplished with an electric motor. Batteries store energy recovered during braking and supply that energy back to the electric motor, cutting down on the amount of gas used. A 2008 Toyota Prius, for example, gets an EPA estimated 46 MPG for combined use, while a 2008 Honda Civic Hybrid gets an EPA combined rating of 42 MPG.

Hybrid Types. However, make sure you understand what type of hybrid you’re buying. Some hybrids are designed not to save gas, but to increase performance. For example, there are sports autos that take the gas engine from another model and add an electric motor to increase power. This design uses less gas than an auto with a bigger gas engine, but could actually use more gas overall than the same auto without the electric motor. A 2008 Lexus GS 450h gets an EPA estimated 23 MPG combined, while the 2008 Ford Escape Hybrid gets an EPA rated 32 MPG. Buying a hybrid doesn’t automatically mean you’ll get better mileage than a big SUV does.

Discounts. You could be eligible for discounts if you buy a hybrid. Although their numbers are dropping quickly, some hybrid models may qualify for a federal tax incentive. In addition, many states offer tax incentives, parking incentives, and other toll or driving incentives. When you add these savings into the amount you can save in gas, suddenly a hybrid auto doesn’t seem as expensive.

Auto Insurance. Another great savings opportunity could be a discount on your auto insurance rate. Some companies have started to feature discounts of up to 10% for hybrid auto insurance rates, although it depends on the type of hybrid. You’ll need to shop around and compare auto insurance rates from different companies to see who has the best rate. If you need help finding your best cheap online auto insurance rate, you can use our online auto insurance quotes tool.

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.

1) Determine appropriate coverage.
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. 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.”

2) Shop around for insurance.
“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.”

3) Look for insurance discounts.
“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.”

4) Consider taking a higher deductible.
“You could lower your insurance bill by increasing your deductible,” Mahrt says. “But just make sure you can pay the higher deductible if you file a claim.”

5) Look into “stacking” coverages if you file an insurance claim.
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. “Be sure to check your auto insurance contract to see if it’s allowed. “Be advised that you`ll likely pay a higher insurance premium if you have stacked coverage. “It could be 10% to 30% more depending on the litigious nature of the state in which you reside,” says Kummer.

6) Check with your insurance provider BEFORE buying a car.
“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.

7) Notify your auto insurance company as soon as you change companies.
“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.

Pick the insurance payment option that best fits your budget.
“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.”

How Does it Work?
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.”

However, Insurance Commissioner Steve Poizner, proposed a plan with three options for reporting mileage:

 >with electronic monitoring of mileage 
 >submission of maintenance records or
 >having regular odometer checks by insurance company representatives.
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 Company Line
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.

A Real World Example—MyRate(sm) by Progressive
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.”

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.

Winners and Losers
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.

Save Money, Save the World?
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.

Risk Versus Reward
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.

What Would You Do?
So, are the potential savings worth it? Would you voluntarily place a tracking device in your vehicle for auto insurance savings? Let us know!