Auto Insurance - Do Your Homework for Lower Premiums

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There are rules of the road every driver must follow, including buying auto insurance. Following the rules can be expensive, but there are ways to control your costs. You may be able to trim those auto insurance rates by doing your homework:

1. Shop around. Make sure you’re being offered the best rates possible. You can also find more information on the California Department of insurance Web site,  Californians can compare insurance companies, find agents and get the latest news and tips about pertinent insurance topics.

How are premiums determined? In California the implementation of Proposition 103, the 1988 insurance reform initiative, requires that insurance companies count a motorist's driving safety record, miles driven annually and years of driving experience more than any other factor when they set auto premiums. The company charges a premium based on risk characteristics. Components to rate making are:

  • Age, Gender, Marital Status
  • Driving History
  • Residence: Urban/Rural
  • Vehicle details
  • Use of Vehicle
  • Deductibles
  • Discounts
  • Surcharges

Compare Location

Location A
Type of Coverage Location Insurance for Annual Mileage Driving Record
Standard Alameda County Oakland -Piedmont Married Couple 9,000 – 16,000 Husband and wife have no violations (with Multi-Policy Discount)
Location B
Type of Coverage Location Insurance for Annual Mileage Driving Record
Standard San Francisco County Sunset District Married Couple 9,000 – 16,000 Husband and wife have no violations (with Multi-Policy Discount)
Company Location A Location B
A $2294 $2250
B $2042 $2424
C $2341 $2418
D $2464 $2930

This example shows how gender and type of vehicle can affect your rates:

Compare Gender & Vehicle

Example A
Type of Coverage Location Insurance for Years Licensed Annual Mileage Driving Record Vehicle
Standard Alameda County Oakland-Piedmont Female 9 to 15 7,600 – 10,000 1 traffic ticket Honda Accord
Example B
Type of Coverage Location Insurance for Years Licensed Annual Mileage Driving Record Vehicle
Standard Alameda County Oakland-Piedmont Male 9 to 15 7,600 – 10,000 1 traffic ticket BMW 328i
Company Example A Example B
A $2282 $2938
B $2348 $3202
C $2175 $2635
D $2534 $4558

Source: California Department of Insurance – Premiums for year 2010

2. Bundle insurance. Many providers will offer discounts if you buy multiple insurance plans from one company. Bundling plans such as your homeowners insurance, umbrella insurance with auto coverage may save you money.

3. Take a class. Extended driver’s education classes may help reduce premiums, depending on your auto insurance carrier. A quick course in defensive driving may save you up to 10% off your annual premium The savings may be higher if your record has few blemishes or if you’re 55 or older.

Mature Driver Improvement Course

The Mature Driver Improvement Course provides instruction on defensive driving and California motor vehicle laws. During this course, information is provided on the effects that medication, fatigue, alcohol, visual or auditory limitations have on a person's driving ability.

Mature drivers, 55 or older, who successfully complete an approved Driver Improvement Course can qualify for reduced motor vehicle insurance premiums. California law allows insurance companies to determine the percentage of premium reduction. The insurance carrier can refuse to give a reduced rate to those who have poor driving records. You may wish to ask your insurance company about your eligibility and the amount of discount prior to taking an approved mature Driver Improvement Course.

Course Time and Fees
Course instruction may be obtained in a classroom or non-classroom setting. Actual classroom time is at least 400 minutes of instruction for the initial course and 240 minutes of instruction for the renewal course, not including registration time, breaks, lunch periods, and issuance of completion certificates. The initial course and renewal course must be separate classes, held at separate times. The maximum fee for the classroom or non-classroom course is $30 plus a $1 charge for a DMV certificate to be presented to your insurer as proof you have completed the course.


DMV list Approved Mature Driver Improvement Programs

In addition, you may be able to remove a moving violation from your record, which might otherwise affect your insurance rates, by taking a course at an approved traffic school. Visit for more information.

4. Pay bills on time. A good credit score can improve your rates. Where state law allows, many insurance companies look at your credit score as an indication of your performance behind the wheel. California state law does not permit the use of credit score at this time, however if rules change in the future, paying bills on time can impact your insurance rates.

5. Drive safely. Speeding tickets and even minor accidents can accelerate your premiums. Practice safe driving techniques and when conditions allow, use cruise control when you’re on the highway to prevent speeding. National Safety Council (NSC) research reported that alcohol and lack of seat belts in addition to speeding are the main contributory factors in fatal crashes. Alcohol-impaired drivers are more likely to speed, and speeding drivers are less likely to wear seat belts. Young males are the most likely to be involved in speeding-related crashes.

According to 2007 NHTSA data, 39 percent of male drivers age 15-20 who were involved in fatal crashes were speeding at the time of the crash.

People often think of highways as a major factor for speeding fatalities, perhaps because speeds are highest on highways. But the vast majority of speeding-related fatalities happen on roads that are not interstate highways. NHTSA's 2006 fatality data shows that 47 percent of speed-related fatalities occurred on roads posted at 50 mph or less, and more than 20 percent occurred on roads posted at 35 mph or less. As a general guideline, families can expect their auto insurance premiums to at least double when adding a new teen driver to their policy.


6. Have smart coverage. A high deductible may significantly reduce your premiums. But be sure you will be able to front the cash if a collision occurs.

The statutory minimum limits of liability insurance in California are: Bodily Injury Liability $15,000 for death or injury of any one person/any one accident and $30,000 for all persons in any one accident. Property Damage Liability limit is $5,000 for any one accident. In other words, if someone is injured in an accident that is caused by you while in your car or walking in front of it, you are responsible for their injuries, pain and suffering, and lost wages. If you cause damage to their vehicle, you are responsible for the vehicle repairs. You can also be held responsible for accidents that damage light poles, signs, structures, or anything else you collide with.

Although there are minimums established by the state, they’re not always enough to cover bodily injury and property damage. With the cost of medical coverage and auto repairs on the rise, it may be a good idea to consider higher coverage limits. If you do not have enough coverage, you become personally responsible for the amount that isn’t covered by your insurance policy, putting your personal assets and future wages at risk.

To learn more about coverage that is available for your auto policy, visit

7. Remember the value of your car. Insurance companies consider how much your car is worth when calculating your premiums. A more luxurious car will cost more to insure. Bear that in mind when you’re setting your budget of monthly payments or purchasing a new car. Also, many plans allow discounts for safety features such as anti-lock brakes and side air bags.

Average car insurance premiums for the top 10 selling vehicles

(by sales)
Make and Model Avg. national premium
(averaged across all styles for model)
1 Ford F-Series pickup $1492.71
2 Toyota Camry $1274.61
3 Chevrolet Silverado pickup $1383.10
4 Toyota Corolla $1302.68
5 Honda Accord $1301.20
6 Honda Civic $1362.97
7 Nissan Altima $1399.35
8 Honda CR-V $1161.52
9 Ford Fusion $1354.84
10 Dodge Ram pickup $1467.63

Premium Source:, from a study commissioned by from Quadrant Information Services. Top-selling vehicles in 2009 according to Reuters.
Source: research.

Averages based on a 40-year-old male driver who commutes 12 miles to work, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive. Policy includes uninsured motorist coverage. Rates were averaged across multiple ZIP codes and insurance companies. Average rates are for comparative purposes; your rate will depend on your personal factors.

CTA Auto Insurance Program

It's good to shop around for auto insurance. CTA’s auto insurance program is offered through California Casualty. This program offers many exclusive benefits for CTA members, including no cost for repairs due to vandalism or collision to your parked car that occurs at school, protection for your personal property used in the classroom as well as summer and holiday payment skip options to help with budgeting. For a quote or more information, call 1-866-680-5142, or visit

* Source: Insurance Information Institute,