Susan Tompor| Detroit Free Press
Everybody wants a discount on car insurance. Why else would we watch the Esurance TV ads, where the crazy lady in a beige turtleneck named Beatrice talks about how she shops for car insurance and how she posts vacation photos to her living room wall, instead of mailing the photos to friends, to save money?
Sometimes, though, consumers wouldn't think of some discounts. Would you expect a break because your car has daytime running lights? Yet four of the top 10 insurers offer a discount for daytime running lights, based on a new survey by Bankrate.com.
Daytime running lights are a fairly common feature now. But "you can't really count on your insurance company to know about the equipment on your car," said Doug Whiteman, an insurance analyst for Bankrate.com.
Discounts can vary by state based on what state regulators allow, laws in a given state and what some insurers offer in given markets.
Here are five other ideas for saving money:
• Watch how many miles you drive in a year. The Bankrate.com survey noted that eight out of 10 major insurers surveyed offer a discount for driving a lower amount of miles each year. But you might need an on-board tracking device.
Insurer USAA offers a discount for low annual mileage in many markets but not Hawaii and North Carolina. USAA said its low mileage discount would be for below 5,000 miles per year but the discount does vary by age and state. No monitoring is required.
Allstate noted that it rewards drivers in Michigan and some other states for low mileage through the its "Drivewise" program. Drivers can choose to install a device to track mileage, hard braking, speed and time of day.
"We know these are factors that contribute to a higher frequency of collisions," said Shelley Frost, Allstate senior manager of corporate relations. The voluntary program does not cause a premium to go up. Drivers can earn a 10% reward for enrolling and activating the device, and up to 30% at renewal based on their driving performance.
• Do you belong to a college alumni group, fraternity, sorority, professional group, or credit union?Consider asking whether that qualifies you for a discount. Some discounts apply if you work for a major company, too.
• Look for discounts for anti-theft devices, such as alarm systems. Michigan regulators note that such discounts would likely be applied only to your comprehensive premium. So a consumer who does not carry comprehensive coverage on a car, maybe on an older vehicle, is not going to qualify for that discount.
Some discounts aren't huge, like the daytime running lights discount, and can apply only to some parts of the premium.
Geico notes on its website, for example, that customers could receive a 3% discount on certain insurance coverage for daytime running lights. USAA notes that its discount for daytime running lights is generally 3% to 5% off only the collision coverage, not the entire premium, and the percentage varies by state.
• Get a discount for owning a newer vehicle, say a car that is three years old or newer. But pay attention to the car you buy, as some cost more to insure than others.
• Pay close attention to your credit history. Some of the biggest savings, depending on the insurer, can depend on what's called a credit-based insurance score.
Paying your bills on time and managing your credit can influence your premiums in some way in many states.
"Insurance companies believe that the better your overall financial history, the less likely you are to file an insurance claim, and the more likely you are to pay your insurance premium payments," said Todd Albery, CEO of Quizzle.com, a Detroit-based provider of free credit reports and scores.
Allstate notes online that it never sees your credit score but it will use elements from your credit history, such as late payments or a missed payment. How long have you been using credit? If you had high credit card balances in the past, are those balances lower now? How many credit card accounts or installment loans do you have? Have you had a foreclosure?
In Michigan, as of January 2013, consumers can ask to have their credit re-run for auto insurance coverage. Based on the result, the premium can go up or down. An insurer is not required to recalculate the insurance more than once in a 12-month period.
Odysseas Papadimitriou, CEO of WalletHub.com, said his company's research showed that some insurance premiums on average could be reduced 65% for someone with an excellent credit history, compared with a person with no credit history.
The WalletHub survey noted that credit data has the least impact on insurance premiums in Vermont (an 18% fluctuation) and the greatest impact in the District of Columbia (a 126% fluctuation).
Given the mistakes that can go into credit reports, he noted, consumers should review their credit report for any potential mistakes before shopping for car insurance. It wouldn't help to shop around for premiums, he noted, if you'd get the wrong quote because your credit report is wrong.
Contact Susan Tompor at stompor@freepress.com
