Car Accident

Before you open your next six-month premium notice for your car, sit down. You are going to be shocked and dismayed at the new amount you will have to pay for insurance on your vehicle. The increases range from 10 percent to 25 percent and more.

Even if you have a clean driving record and have had no claims within the past three years, you can expect a significant rate increase. Why are premiums increasing so much?

Several factors are responsible for this increase in premiums. In an article called “Car Insurance Rates Are Going Up,” Consumer Reports explains it this way: “While the long-term trend shows that the number of accidents is declining, the average payout on the accidents that do occur is rising. From 2005 to 2013 (the latest data available), the number of claims for bodily injury fell 14.5 percent, according to the Insurance Research Council, yet the average cost per payout rose 32 percent, to more than $15,500.”

Another factor is the current financial climate of low interest rates. Insurance companies rely on their invested premiums to generate money. When interest rates are low, the return on the invested money is diminished. Therefore, the insurance company must increase premiums.

What can you do to reduce your premiums? If you are age 50 or older, you could take the AARP Safe Driver course either in a classroom or online. The price for the online class is $19.95 for AARP members or $24.95 for non-members. The online class is eight hours of instruction. The student has 60 days to complete the class.

According to the AARP Web site, you will learn

  • Important facts about the effects of medications on driving
  • How to reduce driver distractions
  • How to maintain proper following distance behind another car
  • Proper use of safety belts, air bags, anti-lock brakes, and new technology found in cars today
  • Techniques for handling left-turns, right-of-way, and roundabouts
  • Age-related physical changes and how to adjust your driving to compensate.

According to the AARP Web site, you could be eligible for a multi-year discount on your insurance premium on your car insurance by taking the class. A State Farm customer age 50 or older can reduce his premium by 15% by taking the class. Ask your own insurance carrier what discount is available.

Go to for more information.

—By Karen Centowski

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