Finding Cheap Auto Insurance Takes Time And Effort
Monday, November 22, 2010 15:31Everyone’s looking for bargains in these tight economic times. That’s especially true in the hunt for cheap auto insurance. However, finding a low price is only part of the solution, because the car insurance has to be sufficient to meet state requirements and give drivers adequate protection.
Insurance industry experts say that drivers can compensate for factors out of their control, such as age, gender, and the number of claims in their region, by performing some “due diligence” before buying insurance. Here are their top tips.
Get several rate quotes from different insurers. Insurance companies’ rates can differ widely even in the same driving market, so shopping around is almost a requirement. One way to look for the best rates is by visiting the website of the state insurance regulatory agency. Most states post consumer guides comparing the premium rates for all companies that issue car insurance in each state. These websites also provide information on each company’s customer service by rating the number of complaints each receives per 1,000 claims. This rating can show which companies give the best service for the lowest price.
Use insurance costs to guide car purchases. In the United States, drivers must carry the minimum insurance amounts mandated by their respective states. However, the year, make and model of a vehicle directly affect insurance costs. So buying required minimum amounts likely would cost more for new, high-end or sporty cars. Even when taking this factor into account, there still could be major differences among various carriers on the premiums for insuring similar cars. So drivers ought to compare the insurance costs of their preferred makes and models before buying.
Select a higher deductible amount. Big savings can be realized by shouldering more of the risk for car damage. Choosing a $1,000 deductible over a $500 amount sometimes can save as much as 40 percent on premiums.
If driving an older car, give up collision and comprehensive insurance. Older cars have lower resale values, and sometimes the cost of repair is more than the car will fetch in open market. To figure out if this is the case, multiply the C&C premium by a factor of 10, then compare that total with the car’s resale value according to a recognized authority, such as the NADA “blue book.” If the car is worth less than the cost of insurance, drop the insurance.
Prove creditworthiness. These days insurance companies are raising the rates on drivers whose credit ratings aren’t very good. By improving credit scores, drivers can reassure insurance companies that they’ll pay their bills.
Dig out the discounts, but don’t lose sight of the big treasure. Getting a good discount can be thrilling, but watch out for insurance companies that jack up their premiums to account for big discounts. Sometimes it can be better to forgo a tempting discount to get a better basic insurance rate. That said, if discounts look like a good deal, then go for every qualified benefit: senior citizens, low mileage, good students, professions such as teachers or military personnel, driver education, good driving record and so on. The ultimate goal is always to get the right amount of coverage when hunting for cheap auto insurance.
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