Auto Insurance

Auto insurance can be confusing, and finding cheap auto insurance can be down right difficult.  If you are not in the insurance business you may not be aware of all the different types of car insurance coverage that are available to you.  You may not know how to find the cheapest car insurance quotes, or what discounts are available.  You may also not know how to search for auto insurance quotes online.
There are many different kinds of auto insurance coverage you should think about, and of course you need to decide what your insurance limits should be.  Learn about the different types of car insurance coverage and the different discounts available.  You should take the time to learn about auto insurance and how it affects you.

Top Things To Know

You are a statistic.  To an insurer, you’re not a person; you’re a set of risks.  An insurer bases its premium (or its decision to insure you at all) on your “risk factors”, including some things that may seem unrelated to driving a car, including your occupation, who you are and how you live.

Insurers differ.  As with anything else you buy, what seems to be the same product can have different prices, depending on the company.  You can save money by comparison shopping.

Don’t just look at price.  A low price is not bargain if an insurer takes forever to service your claim.  Research the insurer’s record for claims service, as well as its financial stability.

Go beyond the basics.  Most states require only a minimum of auto-insurance liability coverage, but you should look for more coverage than that.

Demand discounts.  Insurers provide discounts to reward behavior that reduces risk.  However, Americans waste some $300 billion a year because they forget to ask for them.

Ask for the real thing.  Insurers cut costs by paying only for car parts made by companies other than the car’s manufacturer.  These parts can be inferior.  Demand parts by the original equipment manufacturers (OEMs).

At claims time, your insurer isn’t necessarily your friend.  Your idea of fair compensation may not match your insurer.  Your insurer’s job is to restore you financially.  Your job is to prove your losses so you get what you need.

Prepare before you have to file a claim.  Keep your policy updated, and re-read it before you file a claim so there are not surprises.

Maximizing Your Savings

Lots of discounts are available, but you have to ask for them.  You can’t change many of your risk factors.  But you can save money by taking advantage of discounts that insurers offer for behavior that lowers your risk – from driving less than the average number of miles per year to taking a defensive driving class.  Certain types of people – senior citizens, for instance – also are eligible for lower rates.  You’ll also save if you have certain safety or protective equipment installed in your car, like anti-lock brakes or a security system.  Make sure you ask about these discounts.  Your agent may not tell you about them.

Here are some other money-saving tactics:

Combine coverage.  As with any product, it’s cheaper for insurance companies to sell more to one customer, so insurers often cut premiums up to 15 percent if you link auto and homeowners’ policies.

Sweat the small stuff.  Frequent claims are red flags for insurers; some won’t renew policyholders with more than two claims in three years. 

Raise your deductible.  The average driver files a collision claim once every three years and a comprehensive claim once every 10 years.  Increasing the collision deductible on your auto policy from $200 to $500 can save up to 30 percent annually.  Given the likelihood of filing a claim, you might come out ahead with the higher deductible.

Drive safely.  A clean driving record – for the last 36 months – keeps your premiums low.  Completing a defensive driving course can also qualify you for a discount.

Pick the car carefully.  Cars that cost a lot to repair, or that are popular with thieves, can cost more to insure.  The National Insurance Crime Bureau (https://www.nicb.org/cps/rde/xchg/
nicb/hs.xsl/index.htm) has a list of the most frequently stolen cars.

Get your records straight.  Insurers have access to all sorts of personal information, including your motor vehicle record, credit record, and your history of claims with other insurers.  It makes no sense to lie about your background.  Mistakes can happen, however, and a glitch on your report could make you look like a worse risk than you are.  If you haven’t done so in a few years, consider obtaining your credit report from all three credit reporting services – Equifax, Experian, and TransUnion.  For a combined report, check out http://www.consumerinfo.com/.

Source: http://money.cnn.com/magazines/moneymag/money101/lesson22/