Save money on insurance premiums

'Secrets Your Car Insurer Won't Tell You" is a thought-provoking article by Jim McCaffrey in the latest AAA magazine.

McCaffrey's tips are helpful, but I am not certain the insurance agents I know deliberately withhold beneficial information. Here are the author's "inside secrets," summarized for our readers:

--Good credit pays less: Almost all insurers use your credit report because studies show a direct correlation between credit score and the likelihood of filing a claim. Bills paid in a timely fashion to longstanding credit accounts mean you are more stable. This helps create your "insurance credit score" and factors into your auto insurance rate. The author's "Insider Tip": If your credit history is shaky, clean it up as soon as you can.

--Car models affect premiums: Auto insurers have a private rating system for every car make and model. Cars are rated from 1 to 27. The higher the number, the higher the premium. "Insider Tip": If you are buying a new car, ask your insurance company for rate differences for cars you are considering.

--Avoid installment fees: "Fractional premium" fees are usually charged for paying in installments. The more you break up your payments, whether monthly or quarterly, the more fees add up. "Insider Tip": If you can pay up front, it will save you a few dollars.

--CDs aren't covered: Stolen or damaged personal items such as compact discs aren't covered by auto insurance. "Insider Tip": You can file a claim on your homeowner's policy. If you typically carry expensive items, ask about a rider to your home insurance policy.

--Bad driving raises rates: The industry standard is to increase your premium by 40 percent of the insurer's base rate after your first at-fault accident. Regardless of what formula the insurance company uses, in the majority of cases, rates will go up. No "Insider Tip" was offered on this one, but we all know what to do to avoid "at-fault" accidents.

--Friends can cost you: If your friend borrows your car and crashes it, you'll have to file a claim with your insurance company. You will pay any deductible that applies and your rates will probably go up. "Insider Tip": If your friend didn't have permission to take your car, in most cases you won't be held liable. But if your friend had permission and is uninsured, and causes damage exceeding your policy limits, the injured party can sue you for medical and property damage expenses. Best bet? Don't lend out your car.

--What's your car worth (in the case of a car being "totaled"): Each company has its own proprietary list of car values, with many factoring in where you live, the car's mileage and its preaccident condition. "Insider Tip": If you disagree with your insurer's value determination, consider providing maintenance records to show routine care and the car's good condition. You could also step up the process by going to mediation or arbitration.

Safety course

This columnist will offer his next AARP Driver Safety course Dec. 8 at East Cooper Regional Medical Center. Membership in the AARP is not required to attend.

If you are interested, call the program coordinator, Shirley Nilson, at 856-4430.

George Spaulding is a retired General Motors executive and distinguished executive-in-residence emeritus at the School of Business and Economics at the College of Charleston.