Welcome to 2003, where it will cost you more to fix your car, and repair your home. Dr. Robert Hartwig with the Insurance Information Institute explains, "We estimate that the cost of auto and homeowners insurance rates in 2003 will rise by 8-to-10%. This will vary according to state, and will vary according to the insurance company that you have."
The rates are set by a number of factors, including where you live and how old you are. Families with teenagers pay more for auto insurance. So do men, as statistics show men have more accidents than woman. Your credit history, driving record and the car you drive will also make a difference. Brian O'Neill with the Insurance Institute for Highway Safety says, "If you have a vehicle with poor bumpers and one that's easily damaged in low-speed crashes, that vehicle is likely to have high collision coverage rates. If you have a vehicle that offers good protection against injury in crashes, then that vehicle is likely to have lower rates for some of the medical coverage."
The troubles on Wall Street will also affect the premiums you'll pay this year. Dr. Sean Mooney is an insurance industry analyst. He says, "Until recently, insurance companies paid out more in claims and expenses than they took in premiums and they could make up the difference in money they made from their investments. That cushion or that subsidy that they got from the investment side of the equation is no longer there so they're going to have to raise rates to make up the difference."
If you want to spend wisely, you'll need to do some homework. First, shop around and compare prices look for additional discounts such as insuring both your home and car with the same company. Take advantage of discounts for being a good driver or good student. You may also get discounts for insuring more than one vehicle, taking a defensive driving course or equipping your car and home with certain safety devices. Pay for small damage claims yourself. That way your insurance record stays clean. Finally, consider raising the deductibles on your home and car. Hartwig says, "If you raise your homeowner's deductible from 250 to 500 or even a thousand dollars, you can save 20-30% or more off your premium. The same thing will happen with your auto insurance."
Rates and rate changes will vary so check with your insurance agent to see if you should expect higher charges this year. For NewsChannel 11, I'm Sharon Maines.