Auto Insurance Tips

Customer Service

One of the many things you should consider when evaluating car insurance companies is the ease of use of the companies in question. Think about how you like to do business.

Customer Service
If you like to view your policy, make payments, and get your questions answered online, choose a company that has invested a lot of time and planning into their online system. If you prefer phone service, choose a company that has an operator and phone system that you like and one that doesn't make you spend a lot of time in an automated system.

Payment Options
Make sure the auto insurance companies you consider offer the payment options you want. If you want to pay via an automatic debit from your bank account, make sure the company offers ACH (Automated Clearing House) payments. If you prefer to send a check in quarterly, make sure the company allows that.

Remember, your needs are important. Know what you want and make sure your auto insurance company can deliver it.

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Fitting Car Insurance Into Your Budget

Your family's budget is not necessarily a flexible thing. After all, it's likely that your income is fixed, and most of your bills--car payment, house payment, rent, electricity, cable--are probably fixed as well. That leaves a very small and often inflexible space in your budget for car insurance. This reality forces many families to chase after the lowest price, which often leads them to choose minimum car insurance coverage. As long as you aren't involved in an accident, that might be fine, but minimum car insurance coverage can really come back to bite you if you do have an accident.

When you choose your limits and deductibles, make sure they're reasonable for both your reimbursement and your wallet, because limits that are too low and deductibles that are too high are probably going to wreak more havoc on your budget than a higher insurance premium might. This could put your family at risk for both reduced savings and limited automobile use after an accident.

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Uninsured and Underinsured Coverage

One often overlooked auto insurance coverage is uninsured or underinsured motorist coverage. Everyday, thousands of uninsured motorists take to the road with you. Thousands more have insurance, but not enough. These two groups, uninsured motorists and underinsured motorists, increase your risk of financial suffering in the event of an accident because you'll either get no money from their insurance policy (because they don't have one) or very little money.

When you get uninsured motorist or underinsured motorist coverage on your own policy, your insurance company will be there for you in the event of an accident, even if it's the uninsured party's fault. That portion of your policy will pay you for your injuries and damages so you don't need to rely on the nonexistent policy of an uninsured motorist or ultra-low policy of the underinsured motorist.

Even if this coverage isn't required by your state, it's definitely worth considering. It will help keep your family's savings in tact in the event of an accident and will reduce the stress you feel when you're out driving with the potentially uninsured masses.

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Auto Insurance Is a Good Idea, Even if It's Not Required

Some drivers feel like they don't need auto insurance unless their car is under lease or loan. In reality, at least 47 U.S. states require their driving residents to have liability insurance and in 22 states, drivers are required to have uninsured motorist coverage. Even if your state doesn't require coverage, it's a good idea to have some level of auto insurance.

Luckily, there are many ways you can get discounts on these necessary coverages, as well as on collision, comprehensive, and other coverages. Some of your discounts can be obtained by:

• Having an anti-theft system installed in your car. This can include car tracking systems and devices that lock your steering wheel.
• Owning a car with airbags. The more airbags you have, the better. Airbags help prevent serious injuries.
• Having anti-lock brakes. Anti-lock brakes help you maintain control over the steering of your vehicle when you're braking, thereby reducing the likelihood of an accident.
• Buying a car with automatic seat belts. Automatic seat belts can reduce injuries in the event of an accident.

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Understanding Limits

When searching for minimum car insurance coverage, you might be tempted to choose limits that are lower than you actually need. Limits are the maximum insurance benefits that you car insurance policy will pay out on a claim if your car is totaled. The lower your limits are, the less expensive your car insurance will be, since lower limits mean lower risk for the insurer. With ultra-low limits, you run the risk of having too little insurance benefit and not being made whole after an insurable incident.

Your limits may be based on either the fair market value of your car or its replacement value. If your limits are based on replacement value, then you should choose a limit that's enough to actually buy a new car like the one that you had. If your plan has limits based on fair market value, then you can afford lower limits because you'll be given the value of the car you actually had (with depreciation), rather than what you need to actually replace it. As a guide, use the Kelley Blue Book value of your car to get an idea of its fair market value.

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Loyalty and Car Insurance

Many people stay with one car insurance company for the entire course of their lives. Their relationship with this single insurer begins when they get car insurance under their parent's plan as teens. Then, eventually, once they graduate college and begin having families of their own, they branch out to their own policy with the same company. Many assume that they'll be rewarded for their loyalty by getting less expensive premiums.

While some car insurance companies may have long-term client discounts, many don't. And even those that do might not offer cheaper car insurance rates than a brand new company would. So when you compare auto insurance rates, get ready for the possibility that you might be better off if you change car insurance companies.

When you do change car insurance companies, your new company will handle the transfer. They will contact your existing company if necessary and will ensure that you don't have a gap in coverage by issuing the new policy just as your old policy terminates. This will make your life easier and less expensive.

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The Power of Deductibles

When you compare auto insurance rates online, you'll be asked to choose deductibles for your policy. A deductible is the amount of money you must pay out of pocket before your insurance benefits kick in. While you're experimenting with deductibles and coverages, you'll notice that your rates decrease as your deductibles increase. This is because you're reducing the amount of risk the insurer must take on by committing yourself to paying it. It may be tempting to choose very high deductibles in the interest of keeping your premiums low, but remember that if you have an accident, you must be able to pay the deductible amount.

If you're unable to pay your deductible, you may not be able to afford your car repair bills and get back on the road after an accident. Keep your deductibles as high as you can comfortably afford when you compare auto insurance rates and don't create a landmine waiting to explode in the form of too-high deductibles.

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Auto Insurance Discounts

One of the most popular pieces of auto insurance advice out there revolves around how to get auto insurance discounts. Here are just a few tips to help you save money:

1. Drive safely. The fewer tickets you have, the less risk you present to the insurer, and the cheaper you are to insure.
2. Invest in anti-theft. If you use a car tracking system or steering wheel locking device to deter theft, you may qualify for discounts.
3. Cover all cars on one policy. The more cars you cover in your policy, the more discounts you're likely to be entitled to, so try to get all of the cars in your family on the same policy.
4. Take a defensive driving class. Even if you've never had a ticket or an accident, a defensive driving class could get you some extra discounts on your car insurance.
5. Don't buy flashy cars. Flashy, sporty cars are typically more expensive to insure than standard family sedans. Consider this when you're in the market for a new car.

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