Wise Choices – Oregon Automobile Insurance

Oregon law requires all drivers to carry at least minimum levels of liability insurance on their cars. Insurance companies look at many details when setting the price you pay for insurance, and it's important for you to do the same when shopping around for insurance. However, price alone shouldn't be the basis of your decision. You should consider many other factors, such as the quality of service provided, the claims process, policy provisions, and coverage limits.

How can I lower the cost of my auto insurance?

Comparison shop - It pays to shop around – prices for the same coverage can vary greatly. A couple hours of research can save you hundreds of dollars a year

Raise your deductible - The more you pay out of your own pocket before the insurer pays on your claim, the lower your premium will be. By requesting higher deductibles on collision and comprehensive (fire and theft) coverage, you can lower your costs. If you are a safe driver, you will often save more in premiums than you will pay in deductibles.

Drop collision and comprehensive coverages on older cars - If your car is worth less, say, than $1,000, comprehensive/collision coverage premiums and deductibles may cost nearly as much as the car is worth. A local auto dealer or bank can tell you the cash or "blue book" value of your car.

Buy a "low profile" car - Check insurance costs before you buy a new or used car. Insurance costs are higher for makes and models that are expensive to repair or that are frequently stolen. Your agent can assist you in getting the best value for your insurance dollar.

Take advantage of low mileage discounts - Some companies offer significant discounts to drivers who keep their annual mileage at or below certain levels. In general, the less you drive, the more you can save.

Find out about discounts for safety devices - Automatic seat belts, air bags, and anti-lock brakes can help lower your insurance costs and possibly save your life. You may save enough money on insurance over the life of your car to pay for these safety options.

Multi-car discounts - You can save up to 15 percent of your premium costs by insuring two or more of your family passenger cars with one insurer. Exceptions include automobiles used for business or operated by males under age 25 or single females under age 25.

Ask about other discounts - Some insurers offer discounts for nonsmokers, safe driving records, covering more than one car, successful completion of a driver-training course, and good grades for student drivers. Some also offer discounts for security systems. Check with your agent.

Pay your premium in one lump sum - You can sometimes save service charges by paying your premiums in a lump sum rather than by monthly or quarterly payments.

Avoid duplicate coverage - When you rent a car, you will be asked if you want a collision damage waiver (CDW) or similar coverage. If your auto insurance policy covers you for rental cars, you can avoid duplicating this coverage and you may save more than $10 a day off your rental costs.

Keep your insurer informed - Report any changes in the primary use of your car to your insurer. For example, if you move from a densely populated area to a more rural area, or if you move closer to where you work (reducing your commuting distance), your insurance costs may drop.

Be a safe driver - This is the best way to keep your auto insurance premiums low! Lower rates are generally paid by drivers with good driving records. Insurance companies look at your record for only the last three years, so there is hope for even a previously "bad" driver.

Special tips for students

If you're a full-time student, you can usually be added to your parents' auto insurance policy, but the cost of their policy will likely increase. Since one out of three young drivers get in an accident each year, drivers under age 25 are usually classified as "high risk."

Some companies won't insure high-risk drivers or will insure young drivers only if they are added to a family policy. Other companies specialize in high-risk drivers, but their premiums are usually much higher than for average or low-risk drivers. If you have your own car, your parents' company may sell you a separate policy, but usually at a higher rate than your parents pay.

Many insurance companies offer discounts to people who have passed an approved driver education course or have a B grade average or better. Take proof of your driver education and grades with you when you shop for insurance.

How do I choose an insurance company?

When selecting an insurance company, remember that you're buying a service as well as a product. Talk to several agents and companies to find out the levels of service they provide. The convenience of excellent customer service may or may not be worth a little extra in premiums to you.

When you've narrowed the field to three insurers, get price quotes. Be sure to get quotes on identical levels of coverage and service. You should be prepared with the following information:

• The levels of coverage you need. Buy enough to protect your assets; minimum levels of coverage may not be enough:
  – Bodily Injury and Property Damage Liability (Oregon law requires a minimum of $25,000 per person/$50,000 per accident for injury to others and $10,000 for damage to the property of others);
  – Personal Injury Protection (PIP) (Oregon law requires a minimum of $15,000 per person);
  – Uninsured Motorist coverage (Oregon law requires a minimum of $25,000 per person/$50,000 per occurrence for bodily injury);
  – Comprehensive/Collision coverage (optional).
  
  
• Your driving record (you can get a copy of your Oregon driving record from the Division of Motor Vehicles).
  
  
• Your driving distance from home to work.
  
  
• Your car's make, model, year, and any safety or security features.
  
  
• Your average annual mileage.

Oregon Insurance Consumer Advocacy also produces Oregon Insurance Complaints. It ranks companies based on the number of complaints closed by the Consumer Services and Enforcement Section of the Insurance Division. To receive a free copy of this report, please write to: Oregon Insurance Consumer Advocacy, 440-2 Labor & Industries Bldg., Salem, OR 97301-3883, or call (503) 947-7984.

It pays to shop around!

Compare these yearly premiums from three insurers for the same levels of minimum coverage for a 26-year-old female driver.* While your particular circumstances will affect the price you pay for insurance, you can see how shopping around for coverage can save you lots of money.

• Company A: $936.00
  
  
• Company B: $593.80
  
  
• Company C: $271.20

Quoted from the DCBS "Auto Premium Comparison" publication, available from Insurance Consumer Advocacy at the address or phone number listed below.

What determines the price I pay for insurance?

Your premium is based on:

• your age
  
  
• where you live
  
  
• how much you drive
  
  
• the age, make, and model of your car
  
  
• your marital status
  
  
• your driving record
  
  
• your car's safety features
  
  
• the levels of coverage you choose

Wise Choices is an educational series from the Oregon Department of Consumer & Business Services. It's intended to inform Oregonians about their rights in insurance, investments and banking, occupational safety and health, building codes, and workers' compensation.

The information contained in Wise Choices is in the public domain, and may be reprinted without permission.

To receive more information on DCBS programs to protect and educate consumers, please write to: DCBS Wise Choices, PO Box 14480, Salem, OR 97309-0405.