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Housatonic Valley Insurance Agency, Inc.

6 Main St, New Milford, CT, United States
Do I have any control over my auto insurance premiums? 
In today’s market, where affordable personal auto insurance seems less and less available, you may wonder if there’s any way to control rising premiums. You’ve already taken one step by choosing an independent insurance agent, representing multiple companies, so we can give you the right insurance to fit your needs. Besides choosing the right insurance company, there are some other tips to help you control the rates you pay for auto insurance. 
How does insurance work? 
People buy insurance coverage to protect themselves from potential future loss. In exchange for the payment of a known fee—insurance premium—the policyholder is able to transfer the expense of a loss to an insurance company. Insurance works because it allows one policyholder’s loss to be spread among many policyholders. 
Insurance companies can operate successfully because it is unlikely that all policyholders will suffer a loss, at least not at the same time. In a nutshell, insurance pays for the losses of a few by the collected insurance premiums of 
many. 
How are insurance rates determined? 
Insurance cannot be priced like most products because insurance companies don’t know what the policies they sell will cost until all of the claims have been adjusted sometime in the future. Rates 
are dependent on one major factor: the combined cost of all the losses or claims, which is known as the company’s loss experience. An insurer’s loss experience can be expressed as total losses divided by the premiums collected. The 
companies use their loss experience, supplemented by factors reflecting economic trends, as a guide to the 
amount they may expect to pay for future claims and still meet the costs of doing business.
What types of rating classifications apply to auto insurance? 
Once the company has determined its estimated future costs, then rates are set based upon a variety of individual factors. In the case of auto insurance, drivers are categorized into different rating classifications based on the historical experience of the losses of that group. Well-documented actuarial 
studies make it clear that some groups of drivers are more prone to costly accidents than others. Age, gender, experience and marital status are recognized as reliable rate-making criteria. The highest rates usually are assigned to youthful drivers who, as a group, are less experienced than older drivers and have more accidents. 
Rating territory. 
States are divided into rating territories, whose boundaries are determined by such considerations as population density, traffic congestion and other factors which affect incidence of accidents. This includes the number of auto thefts in that territory. The disparity in the rates where a vehicle is insured and where it is actually garaged can be significant; a 2016 report by Verisk Insurance Solutions found that an auto insured in Gary, Ind., but garaged in Chicago would be priced 35 percent lower than it should be. 
Driving record. 
Statistics indicate that people who have been responsible for accidents or have been convicted of serious driving violations in the past are more likely to continue with those habits and have accidents in the future. Drivers with bad records generally are charged more because of the expectation they will have more claims than the average clean driver. 
Obeying the rules of the road and driving defensively are your best ways to lower premiums. Drivers have so many potential distractions: eating, drinking, texting, phoning, grooming, smoking, selecting entertainment, programming electronic maps, managing children or animals, etc. It has become very difficult to stay focused on the deadly serious job of driving a vehicle without distraction. We all need to remind ourselves of this grave responsibility every time we get behind the wheel.
Even though it may be tempting not to report violations and accidents when applying for insurance in order to avoid higher premiums, it is important to know that they nevertheless will show up on the motor vehicle record, which insurance companies monitor. 
Use of car. 
Autos that are regularly driven to and from work usually are more vulnerable to accidents than autos used only for pleasure purposes, because they are frequently exposed to heavy traffic conditions. The same is true for autos used for business purposes throughout the day. You may want to consider driving the lowest-rated auto (i.e., an older auto without physical damage coverage) for activities that have a highest rate (i.e., business use or long-distance commuting to work). The number of miles driven in a year has an impact on the rate. Type of car. Certain types of autos cost more to repair or to replace, based on a variety of factors, including ease of repair, cost of parts and the original price of the auto. These factors are taken into consideration when determining the premium. New autos, for example, are more costly to repair or to replace than older, less-expensive autos. 
Coverage. 
Some people prefer to assume more of the risk of loss on their autos and save on premiums. It may make sense for you to remove collision insurance on older vehicles or increase your deductibles on newer vehicles. A common rule of thumb is that for vehicles more than 10 years old, you might consider removing collision coverage. However, to obtain glass coverage on a vehicle, you would have to maintain other-than-collision (comprehensive) coverage.
Timely premium payment. 
Always pay your premiums on time. Issuing cancellations, processing late payments and then issuing reinstatements add significant costs to the servicing of auto insurance policies. Most insurance companies have a low tolerance for late payments under policies that are eligible for their preferred pricing. 
Credit management.
Many insurance companies have established a link between a person’s credit history and that person’s probability of having an auto claim. As strange as this may sound, there does appear to be an objective basis for using credit analysis, known as insurance credit scores, to predict a class of policyholders that will have greater-than-average loss experience or less-than-average loss experience. Managing your credit will help to lower rates on your auto insurance.
Discounts. 
There are some standard discounts, such as those for taking a driver-training course or a defensive-driving course, qualifying as a good student, insuring multiple vehicles on the same policy, having vehicles equipped with certain safety equipment (i.e., anti-theft devices, passive restraints or anti-lock brakes). Some insurance companies offer a discount for purchasing your homeowner's policy from the same company. The selected premium payment option may also reduce your premium. 
Telematics. 
Telematics describe technologies directed at communicating with a motor vehicle, which has led to “usage-based insurance” programs. Under these voluntary programs, consumers consent to install sensor devices in their cars that catalog data on driving habits and provide discounts to those found to be more careful drivers. Some subscribers may find that UBI programs are helpful in correcting hazardous driving habits that were previously unknown to them; either about themselves or other drivers in the household. On the other hand, some people may find this kind of data collection too intrusive for their comfort. 
State Minimum Coverages are NOT the answer.
Liability insurance is mandated by law in almost every state, and each state outlines the minimum amount you have to carry. State minimum requirements are basically enough for you to register a vehicle in Connecticut, but often not enough to cover even minor accidents. The Insurance Information Institute recommends that you carry at least $100,000 of bodily injury protection per person, $300,000 per accident and $100,000 for property damage (known as 100/300/100). These are the maximums that the insurance company will pay out in any single accident.
Be sure to remember that liability insurance doesn't pay for damages to your own car. It also doesn't pay for your own medical expenses if you're injured in an accident. Liability insurance covers only damage you cause to other vehicles and property, as well as medical expenses for those you injure. Typically, increasing the liability limits doesn't cost much more. No matter what coverages your state requires, you should examine your needs and buy a policy that is right to protect yourself. Housatonic Valley Insurance Agency no longer writes auto policies with coverages lower than 100/300/100, so their insureds are better protected in the event of an accident. If you have assets to protect and a car that you can't afford to replace, it's best to increase your limits and purchase a full coverage policy to provide greater protection. 

Our agency would like to help you take advantage of every possible means of making your auto insurance more affordable. So, please, don’t hesitate to call us for a policy review.

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