Monday, December 19, 2016

10 Secrets from Your Car Insurance Company

Shopping around for car insurance is a given in today’s economy, but getting a decent premium price is just the beginning of what savvy car insurance shoppers need to focus on. What you don’t know can have a big impact on your wallet or pocketbook. Smart Money has some smart tips for keeping as much of your money in your possession, and away from your car insurance company.

1. The motive for recommending a policy may be self interest, not your interest.


Large auto and home insurers use “contingent commissions” to compensate agents that sell their policies. The basic two types of commissions are “steering commissions” for signing customers up for a particular insurance company, and “profit based commissions” for signing customers up who don’t file a lot of costly claims. The problem with the first type of commission is agents may sign you up to a company just for bigger commissions, and the second commission type agents would discourage you from filing a claim at all. Protect yourself by asking agents why they made a certain recommendation.


2. Young drivers are at a disadvantage right from jump.


According to AllInsuranceinfo.org it typically takes three years of driving experience to get a lower rate. Drivers under 25, especially males are in a high risk group and will find it difficult to get insured. In the short term a lower rate is possible by picking a lower engine capacity vehicle, and staying away from high performance sports cars. Younger drivers can also ask their insurer how to get a lower premium rate, which may be as simple as taking a defensive driving course.


3. Bad credit may hurt you as well.


According to the Insurance Information Institute, a New York based organization, over 90 percent of insurers use credit histories as a basis for insurance underwriting. Unfortunately, since the 1990’s insurers have found a correlation between low credit scores and filing multiple claims. Check your credit report for inaccuracies before shopping for insurance.


4. How are insurance premiums calculated? “Good luck finding out for sure”


Prices vary from state to state, and according to a study in 2007 from The National Association of Insurance Commissioners the prices varied from a low of $664 in Iowa to $1,343 in the District of Columbia, based on a 2005 year long average of $949. Twenty years ago premiums fit into four or five pricing tiers, based on a persons age, where they lived, and their driving record. Now many more variables have been added, including home ownership and credit history just to name a few. Insurers use this information differently so it’s almost impossible to figure out where you stand with a particular insurer.


5. Car looks and runs great after repairs, but the value just dropped.


Even after using manufacturer parts and not generic after market parts your cars value may still diminish after an accident and repairs. So there isn’t a total loss the diminished value on the car can be written off your tax return. Consult your tax preparer to get maximum write-off value.


6. Totaled your car? No way your getting full value


You may be surprised to find out that Insurance companies do not use standard sources like Kelly Blue Book to determine valuations. Instead many insurers use claims servicing companies. Don’t accept the first offer from your insurance company. Consult autotrader.com or Edmunds.com to find better comps, and verify prices on the insurers report by calling the sellers listed. If that doesn’t work for you go through your own appraisal-arbitration process by hiring an appraiser, especially if the difference is $1,000 or more.


7. The car is declared totaled by Insurer


It’s becoming even more difficult to have all repairs covered, which is what most policyholders would prefer. An insurer is likely to declare your care totaled if repairs exceed 70 percent of the total value of the vehicle. It’s gets even trickier if the frame is damaged. If you don’t agree with your insurers declaration of totaled you can appeal the decision.


8. Your mechanic is under our employment contract.


Insurers have always had recommended repair shops, but now in the last decade it’s gone a step further. Allstate in 2001 announced the purchase of a nationwide chain of car repair shops. Consumer advocates are nervous with this type of set up. Some site a conflict of interest, especially since insurers are trying to keep cost low. Some insurers may reduce or waive your deductible if you use their recommended repair shop. Just have an after repair mechanic certify the job was done correctly.


9. Brand loyalty may not be a good idea.


You might be better off comparison shopping once a year rather than automatically renewing with the same company. Get a variety of quotes from Allstate, Progressive, Geico, and State Farm. You may be surprised at the results.


10. Switching Carriers may cost you so be careful.


If your going to switch carriers make sure to get a new carrier before you cancel your old carrier. Your vehicle must be covered by insurance at all times with no lapses. if their is a lapse in insurance coverage it may cost you dearly.


Labels: 10 Secrets from Your Car Insurance Company

No comments:

Related Posts Plugin for WordPress, Blogger...