Car Insurance — Things You Need To Understand
CHECKED…1. Do your best to always drive responsibly. It’s a smart decision to NOT drive at all once you’ve taken alcohol(even if it’s just a sip.
Driving while drunk, even if slightly will make you attract sky-high rates if you’re lucky or be forced to be without auto insurance if luck isn’t on your side. While alcohol-related traffic offences have very immediate and grave consequences, speeding tickets will also affect your rates negatively if they pile up. Therefore, if it’s breaking traffic laws, avoid it no matter how negligible it may appear to be at the time.
CHECKED…2…Option…A… Who says your credit rating does not affect your auto insurance rates? Insurers who use it as one of the factors that determine what a person pays say that there is a relationship between the two. These insurers claim that they have statistical evidence to show that people who show irresponsible behavior in their finances are almost always reckless on the road.
CHECKED…2…Option…B…Maintain an outstanding credit rating. Those who have poor credit pay high premiums for every form of insurance and that is also true for auto insurance. This is because insurance companies see people who miss payments as reckless and a bigger risk to them. For most insurance carriers it shows a pattern they believe you might repeat with them in premium defaults. This translates to more risk to them and more expensive rates for you.
CHECKED…3. A multi-vehicle discount is a proven and simple way to enjoy more affordable rates. It It’s advisable to insure all your cars with the same insurer unless got a better rate for a number of your vehicles with another insurer. You can ensure you are choosing the best in your case by doing thorough comparison shopping. Insuring more than one car with the same insurance company will always result in a reasonable discount.
NEW…CHECKED…4. A multi-policy discount is one good option to reduce your total insurance spend. That is, for instance, if you get your auto insurance policy from the very insurer that underwrites your homeowners’ insurance.
Nevertheless, you must be careful because that an insurer gave you cheap rates for one policy doesn’t mean that they will for another one. Comparison shop with quotes sites and then have a chat with your agent. That way, you will be able to determine if staying put would save you more.
NEW…(CHECKED)…5. Staying claims-free will qualify you for a good driver discount. But remember that not all providers offer this discount.
If your insurer is one of those who don’t give this discount tell them point-blank that you will go to another insurance carrier. Really, you should leave them because you will definitely enjoy a better offer somewhere else if you’ve maintained a clean slate for this length of time.
And, believe it or not, your insurer is likely to shift grounds if they see you’re very serious about leaving.
NEW….CHECKED….6. Folks who because of their scope of knowledge keep either collision or comprehensive coverage types or both for an old vehicle that isn’t considered a classic are simply paying a lot more than would serve any useful purpose. A vehicle’s Kelly Blue Book value at point of making claims (and not the cost of the vehicle when you bought it) is what affects what you will get from an insurer. Therefore, you’ll get nothing if this book says that your car isn’t worth a dime at the time of a claim.
Do the wise thing and drop both from your auto insurance policy. You’ll be saving much that way.
NEW…CHECKED…7. Choosing high deductibles is a proven way to land more affordable rates. The best approach is to go for the highest deductible that you can afford with a measure of ease.
Your insurer you to provide this amount.
NEW…CHECKED…8. Drive as little as possible since it will cut down your mileage and get you a low mileage discount. This is particularly true for folks who reside in cities with standard mass transit networks.
You can also bring down your mileage by joining a carpool.
CHECKED…9. Under-25 drivers are given really expensive rates. However, one step you can take to attract cheaper rates if you are part of this age group is keep getting good grades.
You must maintain a grade point not lower than B to have a good student discount. This will slash off up to 5 percent from your rate if you qualify. This is so because insurance providers think there is a correlation between good grades and a young driver’s composure while driving. Reckless under-25 drivers are not likely to maintain good grades.
NEW…CHECKED…10. If you’re a senior citizen you can cut down your rate if you take courses designed for elderly drivers. You can lower your monthly premium by up to 10% the moment you pass this course. You should get more information about this from your agent.
NEW…CHECKED…11. Are you a retired person? Then you’re eligible for a retiree discount with most insurance providers. The obvious argument for this discount is that retired persons normally drive less. Driving less will lead to reduced mileage which surely makes you a better risk.
Don’t forget that you are eligible for this if you are retired. Find out your insurance provider’s stance on this. And, if your he/she tells you they do NOT have this particular discount, do your best to report the dramatic change in your mileage. This should reflect in better rates for you.
NEW…CHECKED…12. .Try to install theft-deterrent devices in your vehicle. The risk of theft is an important indicator that influences your rate. And since these devices lower the odds, you’ll attract a sizeable discount if they are fitted in your car. Car thieves will think twice before trying to steal a vehicle with anti-theft mechanisms.
CHECKED…13. Joining an auto club could get you a discount with a good number of insurance companies. Even if this discount is quite little it’s still something.
NEW…CHECKED…14. You can attract discounts from some insurance carriers if you’re a member of associations moreso the larger ones. They will get many of the members easily if an association decides to take them as their insurance carrier. Therefore, check, one of those groups might have rebates that will benefit you.
NEW…CHECKED…15. A number of insurance companies will give you a discount if a child on your auto insurance policy goes to college and does not use the vehicle at that period. If your kid is in college then you should ask your agent about the possibility of getting this discount. I must stress, however, that a number of insurance carriers don’t give this.
CHECKED…16. There are cars that cost far more to give adequate auto insurance coverage. It will help a lot if you ask your agent before choosing your next vehicle. A car of similar specification that has a bad crash rating and higher theft rate will cost a lot more to insure.
Another thing to find out is a car’s maintainance cost since it is as well an issue that determines your auto insurance premium. I don’t know about you; but it does make sense to buy a comparable car that is more insurance-friendly.
NEW…CHECKED…17. It will cost you a lot more to insure a vehicle if it has a poor safety rating. Does your car have built-in safety mechanisms? You’ll be eligible for a Safe Car discount if your car has such features. Examples of such safety features are air bags, automatic seatbelt, ABS brakes and daytime running lights. To get more information on these and how much you can save by fixing them, talk with your agent.
18. Becoming a part of a car pool will help you get a cheaper rate. Using a carpool helps to bring down your mileage which is an important parameter for calculating your premium. Anything that cuts down your mileage clearly reduces your auto insurance premium.
NEW…CHECKED…19. If you are an employee of a large firm you could enjoy a group discount. If you’ve not checked, do. Insurance companies give big organizations big discounts in the hope of wooing members of that organization.
CHECKED…20. Certain lines of duty get more affordable rates. Scientists are the cheapest to insure while business owners get the highest rates. Statistics, for instance, shows that scientists (due to their orientation and culture) are better risks than all other professions.
If you want to find out where your profession belongs and what to do, see your agent. Just bear in mind that each insurance provider might have a slightly different position.
NEW…CHECKED…21. You will spend much more on car insurance if you live in Tampa Florida than you would if you lived in some sparsely populated area. If you can live in a rural area you will be eligible for the lower rates because the risk of vandalism, crash or theft is very low in such places.
NEW…CHECKED…22. You might reduce your rate if you take time to review your auto insurance policy every once in a while. It is sad to state that many people are still paying for coverage points they needed some time in the past but no longer need for now. A good instance is a case where someone leaves their wedded daughter on their policy for close to a year simply because it did NOT occur to them.
The changes in your personal details might have qualified you for particular discounts. You might also have “outgrown” the need for several coverage types.
Re-examine your auto insurance policy not less than once a year. You’ll be pleasantly surprised if you find out that you need to make adjustments or if you see changes that will give you big savings.
CHECKED…23. Do your utmost to always make sure your policy never lapses. It will make you pay expensive premiums for a long time. Don’t allow this mistake while switching since that’s one situation where this happens to a lot of people.
A simple way to ensure you do NOT make this type of mistake is to maintain your old policy until you’ve confirmed that the new policy is in full force. It appear to be simple but, believe it or not, many individuals are paying higher rates today just because they overlooked this.
24. Do you know that you might be losing money if you have a car that you’ve not used for months? Do you have a broken car? Are you still paying premiums on such a car because you did NOT remember to remove it from your auto insurance policy?
The painful reality is that more people than you could imagine are paying higher rates than they should because of such negligence. I hope this is not the case with you.
25. You’ll attract cheaper rates if you opt to pay your premiums yearly and not monthly. True, monthly payments might be convenient but they are also costly.
Every check that is processed attracts a charge. All through a year, your monthly checks would be processed separately because they are all different transactions. This means that you’ll pay transaction charges twelve times..
Besides there are also administrative costs that are incurred due to the monthly payment option. For example, it costs insurers millions of dollars every year to send out payment notices..
The additional administrative cost to your insurance provider is ultimately borne by you (that’s apart from their own profit margin for providing such a “convenient” option).
26. A simple but rewarding way of reducing your rate is by authorizing an EFT (Electronic Funds Transfer). This simply means your insurance provider withdraws your premiums automatically from your account each month without sending you payment notices. This removes administrative overheads like those involved in mailing payment notices. Your premium is therefore reduced to reflect the cheaper cost of giving you insurance.
27. Under-25 drivers get higher rates than any other age group. Worse still, if they are teenagers their auto insurance rates could be really high.
Therefore, as much as possible, do not place such a driver on your own policy. It will drive it up by a huge margin. Your teen driver should have his/her own policy. This will be made possible if you sign an exclusion form.
If a teen is keen on driving then then should be made responsible for at least the cost of their auto insurance. This act will save you more than money as your teen driver will happily listen when suggestions are made on things that will bring down the high rates they pay. The full implication of this is that your teen will be a lot safer as they’d do their best to avoid inflating their rates.
I STOPPED HERE On Preparation for FTS…
28. The longer you stick with the same insurer the more you stand to gain for two reasons: The long term discount and accident forgiveness. Most insurers will give you a discount of about 5% if you stay with them for up to five years (some will give you once you stay for up to three.
Furthermore, if a long term policy holder files just one claim, most insurers will NOT raise their rates thereafter. It makes sense for the insurer as it is cheaper to give discounts to existing policy holders than to acquire new ones.
But it will only be right for me to also point out that in spite of these incentives, you might actually gain more if you switch to another insurer.
If your auto insurance rate is $2,500 and you get a 5% discount when you stay for about 5 years you’ll pay $2,500 – (5% of $2,500 or $125) = $2,375.
But because of inflation, insurance companies may have to re-adjust their rates to show such changes. But if you are someone who does routine shopping for auto insurance you’ll almost always get an insurer within those years of waiting who’ll give you comparable coverage for less. If this is correct about you then you know it is wise for you to go for the cheaper offer immediately and not wait for years to qualify for a discount that won’t even save you as much.
You’ll most likely pay less if you take the time to shop right since there are hundreds of insurers out there. In order to know if you’re not loosing a better deal, get and compare auto insurance quotes not less than five insurance quotes sites..
29. Try your very best to present your details truthfully. False representation is fraud and affects everyone’s auto insurance rates negatively.
If you couldn’t care less about the cost to everyone in general, don’t forget that your insurer is free to cancel your policy on the grounds of false representation. This could make you lose a lot more than what you thought you would save. Insurers increase your rates by a good margin once you’ve let your policy lapse or had it cancelled for reasons like this.
Reports have it that the average American family pays about $1,500 extra premium dollars because of insurance fraud. You can save us all this extra burden by representing your details truthfully.
30. A1…You might be duplicating coverage and paying more unnecessarily if you have a very good health insurance coverage and also an extensive personal injury protection on your auto insurance policy.
A2…Having an extensive personal injury protection is unnecessary and costly if you have a very good health insurance coverage.
B1…Make your personal injury protection as low as the minimum required by law in your state if your health insurance coverage takes proper care of you in case of an accident.
B2…If you can, eliminate it totally if the law allows provided you’ve confirmed that your health insurance policy will take care of you if you are involved in an accident.
C1…It doesn’t make sense to pay premiums that won’t translate to benefits.
C2…Why should you pay higher rates that will NOT translate to more benefits?
31. There are useful extras and there are those that do nothing but just inflate your rate. A good example of the later is adding a towing service to your policy. By the way, your credit card might already offer this as a benefit so check.
Overall, you’re better off using a third pary towing service than placing it on your auto insurance policy.
32. Make sure your car is always parked in a safe place. This means that you have to do all within your power to NOT park your car in a red light district. Parking your car in a garage will help you reduce your rate over time.
Also make sure that your car is always parked in a well-lit area. It’s certainly not a good idea to leave your car in the open street all through the night.
I STOPPED HERE FOR AMA!
33. Stay claims-free for more than three years and most insurers will give you a special discount. Here’s a tip: Even though you might have cause to make a claim, don’t if they are minor issues. Handling little fixes on your own will help you save more as you’ll get a big discount.
Don’t Use With 41…34. Given similar circumstances, an insurer will give a female driver a cheaper rate than her male counterpart. Therefore, if you’re married buy your auto insurance policy in the wife’s name and let the man be listed as a secondary driver. For marriages that don’t have issues with ego and stuff like that, this is a good way to save on your rates.
35. Running a business through the internet is a lot cheaper than a brick and mortar approach. By extension, insurance providers spend less online and therefore give a massive discount of about 15% for those who buy their policy online.
This makes it obvious that you’ll save a lot more if you buy online.
Do your utmost to present your details truthfully. Insurers are mandated by law to cancel any policy once they can prove that the policy holder gave false details.
Don’t also forget to confirm your preferred insurer’s rating and standing with your state’s department of insurance an other financial rating institutions.
36. Do not include rental car coverage in your auto insurance policy without confirming if your credit card offers such a benefit. More often than not, you’ll discover that your credit card provider has already given you this coverage as added value. So it’s a good idea to confirm first before you buy an unnecessary coverage.
37. A1…Reduce your Bodily injury liability coverage to the very minimum required by your state law and buy an umbrella policy instead.
A2…Buy an umbrellar policy and reduce your bodily injury liability coverage to the barest minimum stipulated by law.
B1…This is particularly true if you have considerable assets that could be lost to a lawsuit.
B2…The more substantial your assest, they more this recommendation is true in your case.
C1..For those who don’t know what bodily injury liability coverage is, it is the part of an auto insurance policy that compensates passengers in your car along with the driver and passengers in the other car if an accident occurs.
C2…What do you buy bodily injury liability coverage for? It’s to take care of passengers involved in an accident along with the other driver.
D1…It protects your assets from lawsuits.
D2…If you don’t have coverage like this, your assets could be used to compensate victims in accidents.
E1…The logic behind this advice is that no matter how extensive the liability coverage you buy with your auto insurance you could still easily be in deep trouble if you at fault in an accident that injures people badly.
E2…You are, however, urged to opt for an umbrella policy because even the most extensive liability coverage within an auto insurance policy wouldn’t be adequate if you’re at fault in a fatal accident.
F1..If your liability coverage can’t take car of their medical bills and damages awarded against you, you could lose all your assets, life savings and even your home.
F2…This means that your personal assets will be liable if your liability coverage cannot handle the result bills and damages incurred.
G1…However, there is hardly a law suit or liability issue that an umbrella policy won’t take care of completely.
G2…But if you have an umbrella policy, you’re almost certain that it can handle the most extreme case.
H1…Apart from the fact that an umbrella policy will save you on auto insurance, it covers you from all manner of liability claims whether it’s at home or anywhere else.
H2…Furthermore, you not only save on auto insurance but you also have coverage that takes care of every other kind of liability issue that may arise in your life.
I1…If you compare the extent of coverage you get for similar amounts in premium, an umbrella policy simply knocks a bodily injury liability off…
I2…Price-wise, you get much more coverage per premium dollar with an umbrella policy…
J1…It could cost 35 year old man in an area like New York City about around $300 extra to raise his bodily injury liability from $25,000/$50,000 to $100,000/$300,000 (The first amount in each pair shows the maximum amount that will be paid out to each injured person in an accident. The second amount shows the maximum that can be paid out per accident).
J2…If a 35-year old man who lives in New York City wants to raise his bodily injury to $100K/$300K from $25K/$50K, his rate will increase by $300!
K1…But compare this to the fact that for just less than $300 he could get a $1 million umbrella policy.
K2…However, with an umbrella policy, he’ll spend less than that to get $1 million worth of coverage.
L1…Furthermore, he could make it $2 million by just paying only about $75 more.
L2…And if he chooses to raise the coverage amount of his umbrella policy to $2 million dollars, he’ll only have to pay only $75 more.
M1…If you intend to buy more coverage it will cost you only $50 per million thereafter (This is based on a report by the Insurance Information Institute).
M2…After the $2 million mark, he’ll only need to add $50 to his rate per $1 million extra coverage amount.
N1…Do the maths in your own case and see if it doesn’t pay you a lot more!
N2…If you want more for less then an umbrella policy will do you more good.
38. Defensive driving or any other special driving program approved by your insurer will get you discounts. This makes sense because defensive drivers are statistically better risks to any insurer — They have far fewer car crashes The effect of become a certified defensive driver would be most felt if you belong to a high risk profile like teen drivers. If you consider the huge discount this will result in, a young driver will definitely save thousands in premium dollars in just a few years. So as much as possible, become a defensive driver especially if you under 25. And, don’t forget to tell your agent once you complete the course.
38b. There are programs that are designed to improve your driving. Participate in them. In addition to the fact that they will bring down your rate, they will make you a better driver.
CHECKED…39. Take it upon yourself to ask your agent about all the discounts available to you with your chosen insurer. It’s possible that your agent did not remember to tell you about some. The only way to be sure this is not true in your case is by asking your agent to list out every discount that your preferred insurance carrier offers. You might be in for a very pleasant surprise!
40. A1…If you live in an urban area do your best to use the public transport system as much as possible.
A2…Unless you live in the suburbs, always take advantage of the mass transit.
B1…This will drive down your
B2…The less you use your car, the lower your mileage will be.
C1…And since mileage is a strong factor that determines your premium, you’ll attract more affordable rates.
C2…As you may already know, if your mileage drops, your rates too will drop.
D1…The rule should be: Use your car only when you do not have a more cost-effective alternative.
D2…Therefore, don’t use your car whenever it makes sense to do so.
41. Marriage is something that will do your auto insurance rates a world of good. This is true even though you can’t just go off to marry just because of this. There is evidence to show that married people are a lot more stable than their unmarried counterparts. This makes them more careful on the road and, therefore, a better risk to insurers. Insurers will tell you that their records show that married people make fewer claims. Furthermore, when they do make those claims, they usually cost less on the average than those married by their unmarried counterparts.
42. “Pimping your ride” does NOT help if you want lower rates. If you want to impress your friends with those extra special features like bigger types than the manufacturer’s specification, then be prepared to pay a lot more. Any changes to your vehicle takes your rates up.
43. Do you know that some folks are paying much more in auto insurance because of where their homes are? Do you know also know that homes within the same neighbor might actually fall into different risk zones according to the insurance industry’s mapping?
Therefore, take your time to ask your agent what effect your new zip code would have on your rates before you make that down payment. I know: That isn’t usually an issue when you’re looking for a home but it’s really important.
Since you may live in the same home for decades to come, a difference of $200 in auto insurance rates would amount to thousands over the years.
44. Never leave your car unlocked and running while you dash in to get something. The only easier thing for a thief would be if you handed over your keys as a gift. Car thieves are known to go for easy targets. An unlocked car with the engine running? What could be easier?
45. As an under 25, you can pay lower auto insurance rates if you use your parents’ policy. Your parents certainly belong to a lower risk age group.
You have to bear in mind, though, that the vehicle must be registered in their name and you must be living with them if you want to take advantage of this option. If you want to be the owner of your car, then be the big boy or girl and also own the costly premiums. Sorry, you cannot have both with this option. However, you can still make massive savings by clicking the link at the end of this piece.
Learn more at Individual Health Insurance Quote Online and Cheap California Health Insurance. Chimezirim Odimba is an insurance expert.
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