Car Insurance 101
Last Updated on Tuesday, 25 October 2011 22:10 Written by Otto Tuesday, 25 October 2011 21:25
Having sold cars for many years, one question is that is often asked during the negotiation process is “How much is my insurance going to cost me on this car?” Of course, it is impossible for a car salesman to forecast your car insurance rates. However, having watched hundreds of customers shop for car insurance I have picked up a few tricks that could help you save a significant amount on you next car insurance purchase.
First, don't be tied down to the idea that your current insurance company is giving the best possible rate. Even if you have had your policy with then since the dawn of time you should always check their competition. It’s true that most insurance companies will give you discounts after you have been with them for a while, especially if you haven’t submitted a claim. But keep in mind, insurance is all about the statistical data. In other words, they will lower your rates the least amount that they can to keep you as a customer. They hope that most customers will glance at their policy every three months and not actively try to shop the cost.
It always a good idea to shop for a better rate and you might be surprised how much money you can save. Also, in the United States if you change your insurance company your previous carrier must refund your unearned premium. This means you do not have to wait until you current insurance policy expires to change your coverage or carrier. You can switch at any time and the premium you have already paid will be returned to you when you cancel your policy.
Another factor to keep in mind is to see if an insurance company provides multiple services and coverages. Many times if you can see a substantial discount if they provide a coverage that you need already. For example, RAC Insurance will provide you with a discount on their policy if you also subscribe to their Breakdown Coverage.
Also, understand is that not all coverage’s are exactly the same. Pay close attention to you deductible and the value of the car you are insuring. It doesn't make a lot of sense to carry a two hundred dollar deductible if the majority of “fender-bender” repairs cost less than that. You should keep your deductible in line with the value of car and your own personal level of “peace of mind”.
There is more to your car insurance policy than just the amount that it will cost you every month. You should also inquire to the company’s standard operating procedure in the event you need to file a claim. All insurance companies will try to minimize the amount they have to pay. However, some are more aggressive than others. It’s a good idea to research on-line through policy holder’s blogs and forums and discover what previous customers experiences have been. Keep in mind, when you are reviewing customer's comments that more often people tend to write about about service than good.
Another thing to consider is gap insurance. If you have a outstanding loan on your car. Many times the value of a your car is less than the amount that you owe. You can buy this "gap" coverage when you apply for you loan and it will pay the difference between what the insurance company remits and what you owe on your loan. This will prevent from having to write an additional check if you have inequity.
It is never a perfect science when choosing an automotive insurance policy. However, the worst thing is to do nothing. You should make it a priority at least once a year to compare your rates with what is available. With a little research you could end up saving hundreds of dollars a year…and that’s always worth your time.
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