Auto insurance is a funny thing. Each state has different rules and regulations on how auto insurance coverage should work. Despite all these laws and regulations, consumers have power over their coverage. Just be aware of the 3 facts the auto insurance companies don’t want you to know.
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Buyer beware. Before you purchase any car insurance policy, you need to know what your are dealing with. Consumers who check their rate annually, and are aware of tips like those below, get the best policies at the best rates.
Here are three items that your auto insurance agent won’t tell you when you sign the dotted line:
1. Rates are Always Changing
Auto insurance rates are in a constant state of change. Rates change for a variety of reasons ranging from your driving record improving over time, to new state mandates. This might seem like a bit of work, but checking auto insurance rates on a yearly basis can save you money.
Here is an example. You have a few points on your license from an accident two years back. You just move and change your auto insurance to a new company. This company sees those points on your record and bumps up your rates. To the auto insurance company, you are a higher risk driver due to those points.
A year passes and the points fall off your driving record thanks to your diligence in safe driving. You talk with your auto insurance agent and they notice you no longer have any points on your record. This takes you out of high risk and brings you down to safe driver level. Enjoy that extra money in your bank account.
2. This is Not a Long-Term Contract
Auto insurance is not a long-term contract. There are no early termination fees if you leave a company after a short period of time. The only real headache you would face is all the paper work of signing up with a new auto insurance company.
Even those people who prepay their premiums are not locked into one company. Sure, you might have to call the mother ship office and request a refund. The refund will be prorated even. This kind of leverage means you can shop for new auto insurance without having to worry about early termination fees.
Think about it like this. You prepay your auto insurance premiums in one state. Two months later, you move somewhere else. The insurance company in the original state does not have an office in your new state. You now have to switch companies. Your original insurer now owes you a refund for those unused months.
3. Comparing Auto Insurance Quotes Save You More
Comparing auto insurance rates is the easiest way to drive competition between companies. Getting quotes should not cost you a dime. Make sure you get as detailed of a quote as possible so you can compare apples to apples. Agents want your business and can work the systems to your advantage. Don’t just assume that company x is giving you the best price they can until you tell them what company y is able to do.
The auto insurance industry is not going to openly tell you these little nuggets of money saving goodness. The power is in your hands though. Constantly be on the lookout for changing rates and better coverage. This is your money so invest it wisely.
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