INSURE FOR LESS SMART SHOPPERS CAN GET BREAKS ON AUTO POLICIES, EVEN AS RATES RISE.

Byline: Gregory J. Wilcox Staff Writer

With auto insurance companies in the midst of a rate increase binge, drivers renewing coverage or buying it for the first time can save some money by implementing a simple strategy: Shop around.

It is especially important now since rates are up about 8 percent from last year, obliterating about half the savings that came from roughly five years of rate reductions.

During the first nine months of the year, auto insurers won state approval to raise their California rates by a combined $778 million. Rate increase approvals soared 72 percent through the end of September versus all of 2000, according to the California Department of Insurance.

By comparison, a series of rate reductions since 1996 saved consumers about $1.8 billion.

The discounts helped California end the 1990s with lower-priced auto insurance than at the start of the decade. In 1999, Californians spent an average of $659.35 to insure each vehicle, an 11.8 percent decrease from the average expenditure of $747.97 per vehicle in 1989, according to the National Association of Insurance Commissioners.

Just eight rate increases were approved in 1999, compared with 152 decreases that same year. The next year there were 97 increases approved versus 69 decreases, according to the commission, and the trend continues today.

Industry officials and state regulators say higher claim payouts forced them to hike rates, but consumer advocates claim rates are rising because the industry lost money in the stock market decline.

``They are lying about the reasons,'' said Harvey Rosenfield, president of the Foundation for Taxpayer & Consumer Rights and the author of Proposition 103, an auto insurance reform measure. ``They are scapegoating the policy holders filing claims when it's just about their investment income.''

But all involved in the rate debate agree that consumers can escape some of the financial pain.

George Joseph, chairman and chief executive officer of Los Angeles-based Mercury General Corp., a big auto insurer, says that there is a big difference in the rates each company charges.

``Shop or have your agent shop for you,'' he said. ``And the other thing people ask me is what should I insure.''

For example, it might make sense to drop collision or comprehensive coverage on older cars, especially if they are worth less than $1,000.

That's because any claim for damages would not substantially exceed the yearly cost of the deductible and premium amounts.

And getting a higher deductible on collision and comprehensive coverage lowers the premium amount.

``Do not insure any risk that you can afford to take. Maybe you don't need medical (coverage). What's the depth of your pocket? You can obviously save money by buying higher deductible,'' Joseph said.

So it pays to know what you are shopping for.

For example, some policies pay the medical costs resulting from an accident for you, your family and others in your car up to the specified limit you choose no matter who was at fault. But it may not be necessary if you have other medical insurance.

More than 250 companies are authorized to write auto insurance policies in California, and rates vary widely. There are inexpensive policies to be found, but be prepared to invest some time to find them.

For example, a link to a Progressive Insurance Web site that provided quotes from four companies for coverage on a late-model luxury sedan and 12-year-old domestic sedan.

The quotes for a six-month premium ranged from a high of $2,393 to a low of $792.

It took about 40 minutes to fill out the form.

Most major companies provide quotes online, but they'll want detailed information, so you will have to know exactly what coverage you want.

Also note your vehicle identification numbers because you will probably be asked for them.

A variety of consumer information is available on the Internet, and a good place to start is the state's Insurance Department site, www.insurance.ca.gov.

It includes a bare-bones rate comparison function that can give consumers a general idea of what the rate environment is like.

Staff Writer Evan Pondel contributed to this report.

CAPTION(S):

photo, chart

Photo:

(color) Body shop owner George Kostanian, right, gives Spencer Nguyen of Reseda a repair estimate prior to the insurance company inspection.John Lazar/Staff Photographer

Chart:

AUTO INSURANCE RATES RISE

SOURCE: California Dept of Insurance