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What an Auto Insurance Dealer Won’t Tell You

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Things to remember...

  • Insurance agents are certainly not going to tell you that you are being overcharged for your car insurance coverage
  • Some insurers focus on getting as many low-risk drivers as possible
  • Each state regulates the insurance companies operating within the state, and each maintains a website for consumers and insurance companies alike

Many people rely on auto insurance dealers to tell them everything they need to know about insurance.

This is not always the best way to get all the facts, as many auto insurance dealers earn commissions. They essentially make more money when they get you to buy more insurance.

Car insurance dealers will certainly tell you when you are purchasing too little insurance, as they want you to buy more.

Get all the facts about the car insurance rates available to you by entering your zip code in the FREE search box for immediate quotes!

You are Overpaying

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Insurance agents are certainly not going to tell you that you are being overcharged for your car insurance coverage. It doesn’t mean that you are being over-billed; it means that you could find the same coverage with another car insurance provider for less.

Every car insurance provider specializes in supplying insurance to the driver profile that it deems the most lucrative. Some insurers focus on getting as many low-risk drivers as possible.

Other providers focus on supplying high-cost insurance to high-risk drivers. The low-risk driver who goes with the company that supplies coverage for high-risk drivers might not find the best savings.

Your state’s Department of Insurance just might have some pertinent information regarding the range of prices available to drivers within the state.

Each state regulates the insurance companies operating within the state, and each maintains a website for consumers and insurance companies alike.

While each state’s Department of Insurance website will vary, all agree that comparing quotes from multiple providers is the way to find the lowest rate.

Some offer comparison tool, others offer information and some list complaint ratings so consumers are completely informed.

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There Are Some Options You Don’t Need

Along the same lines as not telling you that you are overpaying, they certainly aren’t going to tell you that you are buying too much coverage.

If you drive an older vehicle, you might not need optional coverage such as collision and comprehensive.

Industry leaders at the National Association of Insurance Commissioners suggest that vehicles with a fair market value under $1,000 will be wasting money if they buy such coverage.

If your vehicle is worth $1,200, and you have a $500 deductible for coverage that costs you $700 a year, you will break even at best if your car is totaled in an accident.

An auto insurance dealer likely won’t tell you that you don’t need coverage like collision and comprehensive. They are going to sell you the coverage because that is what they do for a living.

How Your Rates are Calculated

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Every car insurance company looks at a number of factors to determine an applicant’s risk of being in an accident in the future.

If the risk is high, the insurer will either deny coverage or quote the driver very high rates. Similarly, drivers with a low risk will enjoy lower rates.

There are many different pieces of information that car insurers use to assess your risk when you apply for coverage.

Not all car insurance companies use the same group of factors, but those that insurers might use to calculate your risk are:

  • Driving history. Those with a lot of accidents and tickets are likely to drive the same way.
  • How many miles the vehicle is driven. The vehicle can’t cause an accident if it’s not in use.
  • The region where you live. Accidents and thefts are more likely to occur in highly populated urban areas.
  • How your car is parked. Vehicles that are parked in a street or driveway are more likely to be stolen or suffer damage from trees or the weather.
  • Age. Younger and very older drivers are either likely to be in car accidents and more likely to be seriously injured or killed.
  • Gender. Recent studies have shown that men have a much higher risk of suffering a fatal crash than women.
  • The type of vehicle that is driven. Some vehicles have high safety ratings that decrease the likelihood of a serious or fatal crash; they cost less to insure. Other vehicles have the horsepower to cause serious damage, or they are expensive to repair; these cost more to insure.
  • Credit history. Insurance underwriters claim that financial decisions and driving decisions are linked. Basically, you are either good at both or bad at both.

Some companies also use other markers such as marriage, education, and income level to assist in how they calculate rates. However, exactly how each car insurance provider calculates a driver’s rates is another topic they won’t share with you.

Not one company will reveal whether it values your age over your driving history or your geographical location over your credit history.

They don’t reveal the details of their calculations or other rating methodologies. While some methods have come under fire recently, such as using credit history, insurers don’t have to disregard certain factors unless forced to do so by state law.

States such as Hawaii and Michigan have banned or attempted to ban what some say is a discriminatory practice.

When an Accident Happens

Unfortunately, car insurance companies are businesses, and they are trying to make a profit, quite a sizeable profit.

Their ads and commercials talk about how they will stand behind you after an accident, but the truth is that they will try to pay as little as possible for your claim.

Most auto insurance dealers won’t tell you that after you submit a claim, they might try to offer you as low a settlement as possible.

They certainly won’t tell you that it’s possible they will suspect you of fraud, or that they may just try to apportion some blame to you in order to decrease your settlement.

This is not illegal, it is just the standard operating procedures that insurers must go through to weed out fraud and stay in business.

The Solution

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There is one solution for all of the ways that an auto insurance dealer will use to convince you to go with a car insurance company.

That solution is to research the auto insurance companies yourself!

Find out through customer ratings who has good customer service and which company is stingy at claims time.

Look up financial ratings, and ask family and friends how they like their provider.

Educate yourself about the ins and outs of car insurance coverage, and know how much coverage you need.

Find out how to protect your interests after an accident.

Lastly, get car insurance quotes so you know how much each car insurance provider will charge you. Then you won’t need to rely on an auto insurance dealer to tell you that you are getting the best rate; you’ll know that you are!

Where to Get Quotes

There are many options for getting quotes. You can visit agents or talk to them over the phone at the car insurance provider’s call centers.

However, such an endeavor could certainly take a lot of time!

One option for getting many quotes quickly is to utilize a car insurance quote website.

Those providers do their ultra-secret calculations to assess your risk, and then send you quotes to cover that risk. You can then see the highs and the lows available to you.

Combine that information with your research, and choose the best auto insurance provider possible!

Your search for multiple car insurance quotes starts right here; all you have to do is enter your zip code into the FREE box for a ton of savings now!

FREE Auto Insurance Comparison

Compare quotes from the top auto insurance companies and save!

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