TRENTON — Department of Banking and Insurance Commissioner Richard J. Badolato today reminded New Jersey auto insurance consumers that they can shop around for coverage or seek additional savings offered by their current carrier any time of year. He emphasized that New Jersey drivers are rated for auto insurance by companies using many different factors and companies use those factors in different ways. Therefore, shopping around will often save auto insurance consumers money when the companies’ different approaches to premium rates are applied to their habits and history. He also encouraged consumers to consider whether new technology driven auto insurance features, such as Usage-based insurance (UBI), might be right for them.
“Shopping around for auto insurance is a great way for New Jerseyans to save on their premiums in any season,” said Commissioner Badolato. “People can switch auto insurers any time, not just when their policy is up for renewal. However, for people who like their carrier and wish to stay with that company, they should still talk with their agent, broker or company representative about any new auto insurance savings, including from Usage-based pricing. For people who drive less and safer, policies that emphasize usage patterns may be a viable option.”
Shopping Around
For those who wish to save on auto insurance by shopping around, Commissioner Badolato explained the process for auto insurance shopping.
- Consider what insurance coverage you need. First, review your policy and check your current limits for each coverage section such as liability, collision, comprehensive, Personal Injury Protection (PIP) which is the medical coverage for auto accidents, and additional mandatory features such as uninsured and underinsured motorist coverage. Next, decide whether your current coverage selections are at the levels that best fit your needs, and whether selected deductibles-which you will have to pay if you make a claim-are at amounts that you can afford. The Department provides an interactive guide to determine which coverage is best for you: www.state.nj.us/dobi/autoplanner.htm
- Compare identical policy terms when shopping. The Department’s interactive guide will assist you in making sure you know exactly what coverage with corresponding limits you need for your policy so that you are comparing exactly the same terms when shopping around. Otherwise, consumers may think they are saving premium dollars when in fact they may be comparing policy quotes with differing coverage limits and therefore not making an apples to apples comparison. Print out or write down your coverage selections so that you have them in front of you when contacting carriers for quotes.
- Contact at least a few carriers. By comparing premium quotes for the same coverage from multiple carriers, you can know whether you will save by switching policies to a new company. For a list of companies licensed to write auto insurance in New Jersey, go to the Department’s online list here: www.state.nj.us/dobi/division_consumers/insurance/autoinscontacts.htm
- Consider an insurer’s reputation for stability, policyholder service and claims handling practices. Many insurers offer information about their services on their websites. Companies such as A.M. Best, Moody’s and Standard and Poor’s rate the financial condition of insurers. The Department provides an annual auto insurance consumer information report that ranks carriers based upon their valid auto insurance complaints. Consumers can review a prospective carrier’s current ranking and compare it with prior years by going online here: www.state.nj.us/dobi/division_consumers/pdf/autoconsumerrpt16.pdf
Usage-Based Insurance
Auto insurance premiums are based on a wide range of factors, such as the type of vehicle being insured, miles driven and driver history. Usage-based insurance, places more emphasis on driving behavior, which is typically measured through devices installed in a vehicle or through smart phones. Wireless devices transmit data in real time back to insurers. Devices can measure miles driven, time of day, where the vehicle is driven, rapid acceleration, hard braking, and hard cornering, among other things. The insurer uses collected data to help determine premiums.
- UBI Options Vary. Consumers interested in UBI should ask their carrier what driving activity is measured.
- UBI may directly impact premiums. UBI programs associate costs with individual and current driving behaviors.
- Decide if UBI is right for you. The National Association of Insurance Commissioners (NAIC) has developed an interactive tool called DriveCheck to help consumers decide whether they may benefit from UBI programs. It is found online here: http://insureuonline.org/drivecheck.htm
Inquire about discounts
Whether shopping for a new carrier or renewing with your current one, ask your agent, broker or company representative about currently available discounts. While discounts vary with each company, common ones include:
- Short commute. Many carriers will offer a discount if the driving distance to work is relatively short. These offers vary.
- Multiple cars. Married couples and families insuring all cars with one carrier may save on premiums.
- Multiple policies. Bundling discounts are often available when combining home and vehicle coverage with the same company.
- Safe driver. Many carriers reward drivers each year they are covered without tickets or accidents.
- Good student. Teenage drivers with good grades could decrease their insurance costs.
Additional Information
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