Auto Insurance: Myths And Realities

Two years ago, the editor, Jeff Fortson, wrote an article which appeared in Black Enterprise Magazine dealing with the myths and realities of auto insurance. If you haven't shopped your insurance coverage recently, you may find that you are paying too much.

Auto insurance coverage can be costly. The average annual expenditure for auto insurance came to $785 in 2009 (the most recent data available at the time the article was printed), but premiums can sometimes cost thousands. That same year, the highest average expenditure, in Washington, D.C., came to $1,128, according to the National Association of Insurance Commissioners. You've probably heard the myths out there about what lowers insurance premiums and what doesn't. Here's the truth about four auto insurance myths.

Myth: Red cars cost more to insure.

Auto insurance coverage can be costly. To read the article in its entirety, click here.

Editor's Black Enterprise Article: New Ways to Maximize Your Auto Insurance

In case you missed the editor's article which appeared earlier this year in April's Black Enterprise  magazine related to the myths and reality of auto insurance,  don't fret. The free online version just became available. As we all know, auto insurance coverage can be costly. The average annual expenditure for auto insurance came to $785 in 2009 (the most recent data available), but premiums can sometimes cost thousands. To find out some new ways to save on your auto insurance, click here.

Could Auto Insurance Loyalty Cost You?

When was the last time you switched auto insurance carriers or just simply just shopped around? Jeffrey Gibson, a 45-year-old retail consultant from Yonkers, New York could have saved a lot by just simply shopping around. Gibson was paying $3,390 annually on his 2004 Nissan Maxima before totaling out the vehicle in 2010. After shopping for a replacement vehicle online, Gibson stumbled across a State Farm ad.  After making connections with them, State Farm was able to shave-off approximately $1,241 annually on the 2009 Infiniti M35 he purchased, bringing his premium down to $2,148 annually.

Ironically, prior to Gibson replacing his Maxima, he had been with the same carrier, Geico, since inheriting a car from his late father’s car in 1994.

According to J. D. Power 2011 U. S. National Auto Insurance Study reveals that Gibson is not alone when it comes to changing carriers. Only 13 percent of customers switched carriers over the past 12 months. Now while we're not endorsing one insurance carrier over another, we do recommend that you shop carriers to make sure the price you're paying is inline with the competition.

To find out the other myths and realities of auto insurance shared by the editor of JeffCars.com, pick up April's copy of Black Enterprise Magazine.

Get Rewarded for Driving Less

Rising gas prices might be causing you to drive a lot less than you used to. If that's the case, you could be in for some serious savings on your car insurance. A growing number of insurance companies are helping consumers lower their rates with pay-per-mile or low-mileage discount programs, which is similar to leasing an automobile. If you're racking up less than 15,000 miles annually, it might be time to contact your agent. Each mile you don't drive is less risk for you, as well as the insurance company. If you stop driving to work or decrease your mileage in other ways, you may see savings up to 30%, says Bob Hunter insurance director for the Consumer Federation of America.

Like auto leasing, under the pay-per-mile or low-mileage discount programs, drivers pay only for the miles they drive. To qualify for this type of program, companies such as Progressive, which offers this low-mileage discount in four states, require a small monitoring device to be installed inside your vehicle to track your mileage. General Motors Acceptance Corp. (GMAC), which currently offers low-mileage insurance in 34 states on 2004 and newer GM vehicles equipped with OnStar technology, will automatically monitor the mileage of its insurees.

Just for signing up for these low-mileage programs, new Progressive drivers automatically receive a minimum 5% discount, while new GMAC drivers receive a 26% discount. Furthermore, GMAC drivers accumulating less than 2,500 miles annually on their vehicles could receive a whopping 54% discount.