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Insurance Source
8 Things You Should Know About Auto Insurance
Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t
help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated
points of auto insurance.
Dealing with the ins and outs of auto insurance can be as tricky and confusing as trying to untie the Gordian knot. Although we can`t
help you with the knotty Gordian problem, the following recommendations could help you figure out some of the more complicated
points of auto insurance.
1) Determine appropriate coverage.
Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For
example, Snyder notes that half of your auto insurance bill covers liability and "that has to do with
how you are going to use the vehicle, such as for commuting to work and your driving record. If
you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a
speeding ticket on your record. You can control the other half of your premium which covers damage
or loss to your vehicle, comprehensive and collision coverage."
2) Shop around for insurance.
"In most states," Snyder reports, "there are hundreds of insurers competing for business, so it`s
possible to save hundreds of dollars by obtaining quotes from different auto insurance providers."
Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your
insurance provider to get more than one quote. "It pays you to shop around, especially if you feel
you`ve been paying too much."
3) Look for insurance discounts.
"Many insurers will give you a discount if you buy two or more types of insurance from them, for
example auto and home insurance," confirms John Marchioni, senior vice president of Personal
Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni:
"Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices."
4) Consider taking a higher deductible.
"You could lower your insurance bill by increasing your deductible," Mahrt says. "But just make sure
you can pay the higher deductible if you file a claim."
5) Look into "stacking" coverages if you file an insurance claim.
Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured
motorist coverages means "you can collect from more than one of your auto insurance policies.
Most states prohibit this practice, but there are about 19 states that either allow stacking or don't
address the issue either through legislation or litigation," according to Kummer, director of personal
insurance for the Property Casualty Insurers Association of America. "Be sure to check your auto
insurance contract to see if it's allowed. "Be advised that you`ll likely pay a higher insurance
premium if you have stacked coverage. "It could be 10% to 30% more depending on the litigious
nature of the state in which you reside," says Kummer.
6) Check with your insurance provider BEFORE buying a car.
"Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and
the likelihood of theft," answers Selective`s John Marchioni. Remember to avoid shopping by price
alone. "You want an agent and a company that answer your questions and handle claims fairly and
efficiently," emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.
Help control the price you pay, just ask American Insurance Association executive Dave Snyder. For
example, Snyder notes that half of your auto insurance bill covers liability and "that has to do with
how you are going to use the vehicle, such as for commuting to work and your driving record. If
you`ve got a clean driving record, you figure to pay less for insurance than you would if you had a
speeding ticket on your record. You can control the other half of your premium which covers damage
or loss to your vehicle, comprehensive and collision coverage."
2) Shop around for insurance.
"In most states," Snyder reports, "there are hundreds of insurers competing for business, so it`s
possible to save hundreds of dollars by obtaining quotes from different auto insurance providers."
Picking up on Snyder`s theme is his AIA colleague, Nicole Mahrt. Mahrt urges you to work with your
insurance provider to get more than one quote. "It pays you to shop around, especially if you feel
you`ve been paying too much."
3) Look for insurance discounts.
"Many insurers will give you a discount if you buy two or more types of insurance from them, for
example auto and home insurance," confirms John Marchioni, senior vice president of Personal
Lines for Selective Insurance, in Branchville, N.J. More cost-saving suggestions from Marchioni:
"Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices."
4) Consider taking a higher deductible.
"You could lower your insurance bill by increasing your deductible," Mahrt says. "But just make sure
you can pay the higher deductible if you file a claim."
5) Look into "stacking" coverages if you file an insurance claim.
Insurance trade group officer Daniel Kummer explains that stacking uninsured/underinsured
motorist coverages means "you can collect from more than one of your auto insurance policies.
Most states prohibit this practice, but there are about 19 states that either allow stacking or don't
address the issue either through legislation or litigation," according to Kummer, director of personal
insurance for the Property Casualty Insurers Association of America. "Be sure to check your auto
insurance contract to see if it's allowed. "Be advised that you`ll likely pay a higher insurance
premium if you have stacked coverage. "It could be 10% to 30% more depending on the litigious
nature of the state in which you reside," says Kummer.
6) Check with your insurance provider BEFORE buying a car.
"Your premium is based in part on the car`s sticker price, the cost to repair it, its safety record and
the likelihood of theft," answers Selective`s John Marchioni. Remember to avoid shopping by price
alone. "You want an agent and a company that answer your questions and handle claims fairly and
efficiently," emphasizes Marchioni, senior vice president of Personal Lines for Selective Insurance.
7) Notify your auto insurance company as soon as you change companies.
"Be sure to cancel your old policy," suggests PCI`s Dan Kummer. "Do it the same day, but don`t cancel your old policy until you`ve
lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without
insurance." One last thought from Kummer on the subject: "Most auto insurers specify in your contract that you can terminate your
policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that
over the phone.
8) Pick the insurance payment option that best fits your budget.
"Generally, most companies will give you the ability to pay over time, but that comes at a price," says Kummer. "Your payment could
increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what
ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up."
Suggested Reading:
Three Life Events That Can Greatly Affect Your Auto Insurance Rate
Does Your Occupation Affect Your Auto Insurance Rate?
How Your Driving Record Impacts Your Insurance Rate
8 Things You Should Know About Auto Insurance
Car Insurance For Young Adults
"Be sure to cancel your old policy," suggests PCI`s Dan Kummer. "Do it the same day, but don`t cancel your old policy until you`ve
lined up a new contract. That`s important because some states like New York will fine you for the number of days you go without
insurance." One last thought from Kummer on the subject: "Most auto insurers specify in your contract that you can terminate your
policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that
over the phone.
8) Pick the insurance payment option that best fits your budget.
"Generally, most companies will give you the ability to pay over time, but that comes at a price," says Kummer. "Your payment could
increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what
ever is most convenient for you. Remember, though, that the more you break down your payments, the more the cost adds up."
Suggested Reading:
Three Life Events That Can Greatly Affect Your Auto Insurance Rate
Does Your Occupation Affect Your Auto Insurance Rate?
How Your Driving Record Impacts Your Insurance Rate
8 Things You Should Know About Auto Insurance
Car Insurance For Young Adults
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