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Auto Insurance Rate Wars Call for Shopping

Apr 28, 2007


Have you heard the auto insurance advertisements trumpeting lower rates in Virginia?

Don't get baited into switching or locking in an annual rate without shopping around. Rates are dropping industrywide, and you might wind up paying too much.

Hundreds of insurers write policies in Virginia. Here are some things you should know and do before switching:


Of the top 10 insurers based on market share, these companies lowered their

statewide rates in 2007, as of March 9, according to the State Corporation Commission's Bureau of Insurance:

-- State Farm Mutual Automobile Insurance Co., down 2.8 percent. State Farm has dropped its rate each year since 2004.

-- GEICO General Insurance Co., down 13 percent.

-- Government Employees Insurance Co. (GEICO), down 3 percent.

-- GEICO Indemnity Co., down 4.5 percent.

Companies that lowered their rates in 2006, which still apply this year:

-- United Services Automobile Association (USAA), down 4.9 percent in June and down an additional 6.2 percent in August;

-- USAA Casualty Insurance Co., down 5.2 percent in June, down an additional 0.7 percent in August, then down again 1.1 percent in December;

-- Erie Insurance Exchange, down 5.1 percent in January and down an additional 1.6 percent in June;


You might not get a lower rate.

These are average overall premium decreases. Your rate might be higher or lower depending on your location, driving record, claims filed, type of car, age of driver and other factors.

If you're an existing customer, and you made a policy change - say, adding a teenage son to your policy - or had an accident, that could bump up your premium and offset any decrease.


Now, let's go shopping:

-- Compare rates using the state's premium comparison guide. "Use that as your starting point," advised Robert Hunter, director of insurance for the Consumer Federation of America.

Understand, though, that it is only a guideline meant to give an idea of the premiums that 50 companies quoted for people in different parts of Virginia.

Your premium would be based on your particular circumstances. The premium tables are at

boi/webpages/boivaautoinsurance2b3.htm. Or, get a copy by calling the Bureau of Insurance at (804) 371-9185 or (877) 310-6560.

-- Be sure the coverage quoted by different insurers is comparable. It should be "apples to apples in terms of coverage, deductibles and liability limits," and discounts, SCC spokeswoman Katha Treanor said.

-- Find out your insurance score. This three-digit number supposedly predicts how likely you are to file claims. The score is based on your credit report.

ChoicePoint's C.L.U.E. report details your insurance claims history. The report is free annually, but the insurance score costs $12.95. Both are available at or by calling (866) 312-8076.

ChoicePoint's score range is from below 500 to 997. A score in the 776 to 997 range is considered good; 626 to 775 is average.

Before calling around for premium quotes, get your report and correct any errors that an insurer could use in setting premiums. Errors take time to correct.

So if you're at renewal, get errors corrected later. Then ask the insurer to re-score you and adjust your rate.

"Probably the very best rate is going to go to the person who is married, in the 50-55 age range, driving less than 5,000 miles a year in a vehicle that has a tremendously good safety rating, no driving violations or prior claims, who lives in the suburbs or farmland," said ChoicePoint's John Wilson, assistant vice president in the insurance division.

Get your score and report from the agency that the insurance carrier uses, the consumer federation's Hunter said.

Why are premiums dropping? Fewer accidents, safer cars, fraud- fighting successes and heated-up competition, said Carolyn Gorman, Insurance Information Institute spokeswoman. The downward trend is expected to continue.

-- Contact staff writer Iris Taylor at [email protected] or (804) 649-6349.

(c) 2007 Richmond Times - Dispatch. Provided by ProQuest Information and Learning. All rights Reserved.

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