Tips for Auto Insurance

Overview

How is Your Auto Insurance Rate Determined – Two factors determine what you pay for auto insurance. The first factor is underwriting and the second factor is rating. Insurance companies underwrite to assess the risk associated with an applicant, group the applicant with other similar risks and decide if the company will accept the application. Based on the results of the underwriting process, the rating assigns a price based on what the insurer believes it will cost to assume the financial responsibility for the applicant’s potential claim.

Ask Your Agent About Discounts -Discounts are awarded because the insurance company sees you as a “better risk.” Here are some discounts you should look for: multiple vehicles, driver education courses, good student, safety devices, anti-theft devices, low mileage, good driver/renewal, auto/home package and dividends. Not all states offer all discounts, so check with your agent to see if you qualify.

Check Into Optional Coverage – The most commonly recognised coverages, in addition to the basic liability package,are collision and comprehensive coverages. Collision coverage pays for physical damage to your car as a result of your auto colliding with an object such as a tree or another car.This is relatively expensive coverage and is not required by law. Comprehensive coverage pays for for damage to your auto from almost all other other causes, including fire,severe weather,vandalism,floods and theft.This coverage will also cover broken glass and windshield damage. Comprehensive coverage is less expensive than collision, but is also optional.

Shop Around Before You Buy – When shopping for auto insurance,premium quotations are a useful tool for comparison of different companies products. When asking for price quotations,it is crucial that you provide the same information to each agent or company.The agent will usually request the following information,description of your vehicle,its use,your drivers license number,the number of drivers in your household, the coverages and limits you want.

Read Your Policy Carefully – You should be aware that an auto insurance policy is a legal contract.It is written so that your rights and responsibilities,as well as those of the insurance company, are clearly stated. When you purchase auto insurance, you will receive a policy document.You should read that policy document and make certain you understand its contents. If you have questions about your insurance policy, you can contact your insurance agent for clarification.