Tips To Avoid Car Insurance Premium Increases & Becoming
By Philip Franckel, Tue Dec 6th

Below are some tips to reduce your auto insurance bill, preventsubstantial premium increases and avoid becoming assigned risk.

Claim Reports: You know about credit reports, you should alsoknow about claim reports. C.L.U.E.® (Comprehensive LossUnderwriting Exchange), is a claim report service provided byChoicePoint, Inc. ChoicePoint, Inc. states on their web site"C.L.U.E. is a claim history information exchange that enablesinsurance companies to access prior claim information in theunderwriting and rating process. C.L.U.E. Personal Propertyreports contain up to five years of personal property claimsmatching the search criteria submitted by the inquiringinsurance company. Data provided in C.L.U.E. reports includespolicy information such as name, date of birth and policynumber, and claim information such as date of loss, type of lossand amounts paid."

Tip: C.L.U.E. reports contain information on claims history by aresidence address. Just like credit reports, a C.L.U.E. reportmay have errors. It is advisable to obtain a copy of yourC.L.U.E. report at ChoiceTrust.com to check your report forerrors.

Credit reports: Insurance companies are now looking at creditreports to determine future premiums. They have determined thatpeople with better credit scores have fewer claims.Consequently, if you have a poor credit report you may findyourself paying more for car insurance.

Tip: Always make at least the minimum payment for your bills ontime, particularly your insurance bill.

Glass Coverage: Most auto insurance salespeople recommend "full"glass coverage for an additional premium, when you purchasecollision coverage for your car. They remind you how much itcosts to replace all your windows if broken by a vandal. Whatthey do not tell you, and it is unlikely that they would evenknow (I would only trust the answer from an underwriter, not asales representative), is whether your insurance company willuse a previous glass claim to increase your future premium andwhether they will report your glass claims to C.L.U.E.

Some insurance companies will report glass claims to C.L.U.E.and then use these claims to raise your premium or even worse,cancel your car insurance policy making you assigned risk with asubstantial premium increase. Allstate notified me that afterfour claims in less than five years, they terminated my autoinsurance policy and then offered to sell me coverage in theirIndemnity Company

with a shocking premium increase. These claimsconsisted of two claims for a broken windshield, one for astolen and recovered car and one accident.

I had a sports car and had to endure a total premium increaseover a period of four years of approximately $12,000 and remainclaim free before I became eligible for coverage outside of theassigned risk pool. I wrote a letter to the president ofAllstate complaining that they should not have considered myglass claims when canceling my car insurance because the glassclaims were made under a separate part of the policy for which Ipaid a separate and additional premium. Allstate responded in aletter stating "Although this claim activity does not indicatethat you were directly at fault in each loss, the frequency andseverity of the above losses was not within our range ofacceptability. After careful review, I regret to inform you thatwe cannot reverse our original decision regarding the abovepolicy. We have however continued to offer coverage in ourIndemnity Company."

Tip: Check with the underwriting department of your insurancecompany to see if they will consider glass claims when assessingpremiums or if they report glass claims to C.L.U.E. If yes, donot make a glass claim. The two windshields which Allstateprovided me with were aftermarket windshields which would havecost me less than $300 each. During the last 30 years of mydriving history, I have experienced two broken frontwindshields, one broken rear windshield and two broken sidewindows. While the financial risk of totaling a car can besubstantial, the financial risk of replacing a windshield iscomparatively insignificant. It does not make sense to file aglass claim if it will increase your premium. You may even wantto decline this coverage altogether and save the premium.

Tip for leased vehicles: Some lease agreements require that thecar be returned with an OEM windshield. If you lease a car andreplace a front windshield using your "full" glass coverage,insist that the insurance company provide you with an OEMwindshield from the manufacturer. If you pay for the windshieldyourself, check your lease agreement carefully to see if youmust use an OEM windshield from the manufacturer or if you canuse an aftermarket windshield. Some people with leased cars whohave replaced a windshield with an aftermarket windshield areshocked, when they return their car, to find that the leasingcompany is charging them $800 for a new OEM windshield, eventhough the aftermarket windshield is in perfect condition.

Car Rental & Towing Coverage: While it may be a good idea tohave this coverage, it is not always a good idea to use it. Somepeople have realized that this coverage is not just availablewhen an accident has occurred. For instance, some people haveused the car rental coverage when their car was in a repair shopor the towing coverage when their car broke down on the road. Aswith glass coverage, using this coverage may be the same asfiling a claim.

Tip: Check with the underwriting department of your insurancecompany to see if they will consider rental or towing claimswhen assessing premiums or if they report these claims toC.L.U.E. If yes, do not use car rental or towing coverage unlessyou have had an accident, in which case it will be part of theaccident claim. If you are concerned about towing costs whenyour car breaks down, you can buy one of the roadside assistancememberships such as the one available from AAA which providesadditional benefits not provided by your automobile insurancepolicy.

About the author:Philip Franckel manages HURT911® at http://www.HURT911.org anAccident and Injury Research web site.