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What You Need to Know About Your Auto Insurance

April 14, 2012 | Comments: 0 | Views: 222

If you are shopping for car insurance, there are some things you must know before beginning your search. Firstly, rates vary among insurers. Secondly, you can easily get quoted two different rates from the same insurer! Yes, auto insurance is not a precise science -- knowledge is power and the more you know the better coverage you can receive and at a lower cost to you.

1. No fixed rates -- Certainly, states must approve rate increases before insurers can pass these on to consumers. However, those rate increases are not uniform, rather they represent an average amount customers may pay. You'll come in above or below that rate. Typically, if you have good credit and an exemplary driving record, then your rate increase will be small or nonexistent.

2. Where you live matters -- Insurance agents may not talk much about your neighborhood, but insurance companies place importance on where a policy holder lives. This means accurately giving your right zip code when applying for insurance. If you live in a high claim area, then your rates will reflect that. If you live in a low-crime neighborhood, you'll see corresponding savings. Mistakes on policies are more common than you may think, potentially costing you hundreds of dollars in increased premiums.

3. Same sized car, different rates -- Take two nearly identical cars and the rates should be the same, right? No. In fact, if you take a midsize sedan with a four cylinder engine and equipped with an automatic transmission and compare it with the same make/model with a turbo engine and a stick shift, the performance model will cost you more. That's because the insurer may think you'll engage in more risky driving behavior and will want you to share in funding that risk. Differences between models can be apparent too -- one model may perform well with crash tests while the other one doesn't fare as well.

4. Coverage may vary --One thing consumers should be on the watch for is their coverage. You may think that Brand A and Brand B offer comparable coverage, but when you drill down on the policy, you find subtle differences. Those differences can include exclusions -- what isn't covered -- and can also have an impact on limits or what how much is covered. Match your deductibles too to get an accurate comparison.

5. Bundling does help -- If you own a home, you can save money by bundling your policies. This means having your cars and your home insured by the same company. You can also save money by purchasing an umbrella policy that offers protection in the event you are sued. Discounts average 10 percent when you bundle policies.

Auto insurance rates can change regularly and even rise following a ticket or a car accident. Though insurance rates generally do not fall, you can lower your premiums by switching to an insurer offering a better deal. But watch out -- your current insurer may offer several discounts including a loyalty discount for years of service, something the new insurance carrier can't match, at least not initially.

Matthew C. Keegan is a freelance automotive writer. Matt is also a contributing writer for Andy's Auto Sport and affiliated websites, an aftermarket supplier of quality auto parts including MSD Ignition and Sparco Seats.

Source: EzineArticles
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