Car insurance buying guide

There's nothing funny about how auto-insurance premiums have skyrocketed since 2013, up nearly 10 percent, which is more than six times the rate of overall inflation. If your income is still treading water in today's economy, car insurance is taking a bigger bite out of your household budget.

Hard times have hurt many consumers' credit scores. That could result in rate increases, thanks to most carriers' use of credit scores in setting premiums. Even if they have a perfectly clean driving record, policyholders can pay hundreds of dollars a year more for car insurance if they have anything less than the best credit score, as secretly calculated by each insurer using methods that produce very different scores than the FICO score with which you're more familiar.

The putt-putt economy, unemployment and underemployment, and high premiums have also contributed to an estimated 30 million consumers driving without insurance. That could shift some or all of their liability costs to you.

Some insurers push policyholders to get their cars fixed at specified repair shops, which left our readers less satisfied, so that the companies can cut costs, often through use of cheaper aftermarket replacement parts.

Some cost factors are beyond your control, but there's still plenty you can do to cut your premiums for the auto coverage you need.

Car insurance is a major expense that you'll pay as long as you own a car, so you should invest time to get the best deal. Premiums vary widely by state and carrier. But generally speaking, you'll spend $9,000 to $14,000 over 10 years if you're single to insure one car; $13,000 to $20,800 for two cars if you're married. (Those prices aren't adjusted for inflation.) Shopping smartly can thus help you get the coverage you need at the low end of those price ranges, for savings worth $5,000 to $7,800.

Dig out a copy of your current policy plus records of any at-fault accident claims and moving violations. You'll be asked for this information every time you request a premium quote, and if you have it at your fingertips, the burden of shopping for car insurance can be made a little easier.

Our 2015 study of more than 2 billion car insurance premiums that major insurers charged 20 hypothetical drivers we created in every U.S. general ZIP code, can help take some of the legwork out of your comparison shopping.

Unfortunately, most consumers, 75 percent, haven't shopped for auto insurance in the previous year, and of those who did, most researched only one or two companies, according to one recent insurance-industry survey. By looking further afield, you'll have a better shot at savings.

Because your coverage needs and credit scores change, and insurers generally update their prices every six to 12 months, repeat this shopping comparison every two or three years.

Also shop the market whenever your situation changes, say, if you marry or you need to add a teen to your policy. Ask your insurer what the change will mean for your policy, then shop for a better deal. Forget about getting a separate policy for your teen; we priced that, too, for our 16-year-old sample boy and girl drivers with their own policies, and the premium was almost always more than the increase in cost from adding the kids to their family policy.

Saving is not only a matter of finding the lowest premium. An insurer can charge less in premiums but cost you more overall by lowballing loss estimates, hassling the repair shop to cut corners, and forcing you to pay extra for the manufacturer's replacement parts if you choose them over cheaper knockoffs. It can also unfairly jack up your premiums after an accident.

We surveyed 64,872 ConsumerReports.org subscribers who filed a claim between 2011 and 2014. Eighty-eight percent of them were highly satisfied with the handling of their claims. Among the highest-rated groups were USAA, Amica, and NJM, with overall satisfaction scores of 90 or higher. Those three insurers have consistently earned positions at the top of our ratings at least since 1999. Availability for some insurers is limited by region or policyholder eligibility rules.

A higher deductible reduces your premium because you pay more out of pocket if you have a claim. Hiking your deductible from zero to $1,000 can cut your premium on collision by 0 to 47 percent, on average, depending on which state you live in. The dollar savings, which are related to the overall cost of insurance in your state, ranged from $159 or 20 percent in Ohio to $1,080 or 47 percent in Georgia for the sample single drivers we studied. If you have a good driving record and haven't had an at-fault accident in years, or ever, opting for a higher deductible on collision might be a good bet. Just make sure you can afford to pay it if your luck runs out.

Your liability coverage pays for bodily injury and property damage that you cause in accidents. Don't get caught short by reducing your liability limits to the state minimums. Buying more coverage might seem like an odd way to save, but the benefit comes if you have a costly claim, which can put your personal assets at risk. Buy standard 100/300/100 coverage, which pays for bodily injury up to $100,000 per person and $300,000 per accident, and property damage up to $100,000. If you have a high net worth, boost bodily injury to $250,000 per person and $500,000 per accident.

One of every eight drivers today may be uninsured, according to the Insurance Research Council. If you get hit by an uninsured at-fault driver, you'll have to pay for repairs out of your own pocket, and good luck suing the at-fault driver for damages. Protect yourself by buying uninsured/underinsured motorist protection with the same limits as your liability coverage.

You can probably cancel your collision and/or comprehensive coverage when the annual cost equals or exceeds 10 percent of your car's book value. Otherwise, you could end up paying more over time than you would recoup for repair or replacement of your damaged, stolen, or totaled vehicle.

If you have another car that you can use while your vehicle is being repaired, you don't need to pay for rental-reimbursement coverage. Dump roadside assistance if you have an auto-club membership that's a better deal. Think carefully about personal-injury protection and medical-payments coverage: Forget it if you have good health coverage; keep it if you don't or if your usual passengers might not be well insured.

Claims payment is where the rubber hits the road in car insurance. Your insurer might push you to use shops in a direct-repair program (DRP) or use cheaper replacement parts, rather than the original equipment manufacturer (OEM) parts. Tests by Consumer Reports and others have found that some non-OEM parts fit poorly, are more prone to rust and corrosion, don't always meet federal safety standards, and may not provide good protection in a crash.

In our survey, respondents' satisfaction with repairs was significantly lower among those who felt pressured to use DRP shops and non-OEM parts. And respondents who said they were pressured to use non-OEM parts had significantly more problems with their repairs.

Discounts are designed to attract the business of lower-risk drivers. Always explore what's available, but the actual dollar savings may not match the seemingly big discount promised. For example, the student driver training discount was worth only $63 in annual savings, on average nationally, for our sample 55-year-old married couple with a 16-year-old boy or girl driver on the policy. The discounts were worth more, however, in Louisiana ($155), California ($334), and Massachusetts ($386). The good student discount, on the other hand, was generally more lucrative. This savings, available to families with students under age 25 who can show proof of good academic performance, won our hypothetical family an average national savings of $263, and was especially high in Minnesota ($471), California ($474), and Louisiana ($688).

Also disappointing were the discounts for our single drivers who had vehicles with anti-theft equipment, such as passive and active disabling devices and audible alarms, which amounted to only about $2 a year on average or 2/10 of one percent of the annual premium. Another popular discount, for buying your auto and home insurance from the same company, was worth $97 a year on average nationally for our singles.

Some insurers offer discounts based on electronic monitoring of your driving habits. With Progressive's "Snapshot" discount, eligible drivers in 45 states plug an electronic data recorder into their car's data port (available only for cars from model year 1996 or later). The device tracks miles and time of day the car is driven and how often you brake suddenly. If the device shows that you drive less than average, avoid operation from midnight to 4 a.m., and don't stomp on the brake pedal, you might get up to a 30 percent discount. If it shows that you're a riskier driver, you could see your rate go up by as much as 9 percent in some states. If you quit the program, Progressive won't use the data to set your premium, except in Alabama, where the insurer can use it for a year after you quit.

State Farm's "Drive Safe & Save" discount, available in all 50 states, similarly tracks your acceleration and braking, left and right turns, driving times of day, and speeds over 80 miles per hour.

For some consumers, the recession has dragged down the credit scores that most insurers use to set auto premiums. In general, lower scores produce higher premiums, but the impact varies unpredictably because insurers use various rate-setting formulas. So if your insurer hiked your rate based on your score, start shopping for a lower premium.

All states except California, Hawaii, and Massachusetts allow insurance credit scoring, so take steps to protect yourself: Regularly check and correct credit-reporting errors; avoid department-store credit cards, which can hurt your score; pay bills on time; keep your credit balances low in relation to your credit limits; and ask to be re-scored once per year.

Most important, if your finances have been adversely affected by the recession, military deployment, divorce, job loss, death of a family member, medical problems, identity theft, or other factors out of your control, ask your insurer for an extraordinary life circumstances exception. If the insurer grants your request, your poor insurance credit score won't be used against you to jack up your rate.

A major cost component in auto insurance is miles driven per year. The average is about 12,000. But if you've changed jobs and commute fewer miles, the lower mileage might translate into lower premiums. A new job that's only 6 miles closer than your old one could reduce your annual commuting miles by 3,000 and cut your annual premium by $50. Let your insurer know if you've retired or lost your job; your reduced driving could cut 5 to 10 percent off your premiums.

Vehicle damage is the biggest cost component for auto insurers. So your premiums will vary by auto model. When comparing models, ask your car dealer to show you the "Relative Collision Insurance Cost Information Booklet," produced annually by the National Highway Traffic Safety Administration. The Highway Loss Data Institute also posts data on collision, bodily injury and property-damage liability, and other types of losses by vehicle model at hldi.org/research/hldi/composite_intro.html. Or ask your insurer for premium quotes on the different models under consideration.

Teenage drivers have higher accident rates. Immaturity and lack of driving experience help make motor-vehicle crashes the leading cause of death for U.S. teenagers, though you can protect your child and cut your rates. Adding a teenager to your policy can hike your costs by 90 percent, on average nationally. But the average increases we found for our model 55-year-old married couple with a 16-year-old boy or girl driver added to the family policy varied by state, from a low of 16 percent in Hawaii to a high of 159 percent in North Carolina.

Protect yourself by not simply assuming you'll have to pay a fortune. First find out what your current insurer will charge for the added teen driver, then shop around for a better deal. Some insurers charged our sample married couple as much as 250 percent more for adding a 16-year-old driver to the family policy; others charged a lot less.

Forget about getting a separate policy for your child; we priced that for our 16-year-old sample drivers, and it cost thousands of dollars more than the increase from adding the teen to our 55-year-old married couple's policy.

To better protect your child's safety, don't let your teen get his or her own wheels. "Young people drive more responsibly when they share the family car, because they don't want to get in trouble for damaging it," advises Ruth Shults, a senior epidemiologist at the CDC in the National Center for Injury Prevention and Control. Shults also recommends that parents supervise their child's driving, even beyond the time requirement for that under today's graduated driver licensing programs.

Finally, ask your insurer about the "student away" discount, for kids off at a sufficiently distant college without a car. Insurers say that can save up to 7 percent.

A number of auto insurers have recommended or required use of aftermarket crash parts, which are often produced in overseas factories and can be significantly cheaper than the parts from original equipment manufacturers. Unfortunately, the parts might also be cheaper in quality.

Some safety experts are concerned about the internal bumper parts: a bumper beam, bumper isolators, foam, crush cans, brackets, and radiator supports. In a frontal crash, those pieces work together to properly transmit the crash pulse, or vibrations from impact energy that moves through the vehicle, to air-bag sensors and away from the passenger compartment to reduce or prevent injury.

"There's a lot of engineering that goes into making a crash-protection system," says David Zuby, chief research officer for the Insurance Institute for Highway Safety. "You can't willy-nilly change those parts because the system may not work the way it was designed."

Automakers have found alarming quality differences when they checked aftermarket parts that are sold cheaply to replace the typically more costly original manufacturer replacement parts. Ford, for example, reported that its engineers had found that one bumper bar was made of mild steel, instead of the ultra-high-strength steel that the original Ford part uses. A radiator support was made of plastic instead of the magnesium used in the Ford part. In computer-simulated crash tests, the fakes changed the timing of the crash pulse, which might affect air-bag deployment.

"Differences in material could result in a difference in the timing of the air-bag deployment," says Mike Warwood, Ford's parts marketing and remanufacturing manager. "The air bag might deploy earlier than it should or later than it should. Or it might deploy when it shouldn't or not deploy at all when it should."

Ford's testing followed a demonstration conducted by Toby Chess, a master collision-repair instructor, who used a reciprocating saw to easily slice through an aftermarket bumper bar. The saw couldn't cut through the original automaker bumper bar.

Some insurers have suspended use of the bumpers in repairs. And when the Certified Automotive Parts Association, which tests and certifies the quality of some aftermarket replacement parts (but not bumpers), tested a sample of aftermarket bumpers, it found "serious deficiencies" in metal hardness, material thickness, and fit.

Don't let your insurance company pressure you into using aftermarket collision-repair body parts, especially safety-related ones. If your car has already been repaired, check your invoices or ask your insurer to see whether aftermarket parts were used. If knockoffs were used, demand that they be replaced with original equipment.