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Ten Secrets Most Car Insurers Won’t Tell
You... But We Will!
Knowing how the industry works can save you a lot of money and grief. Here
are the secrets behind the premiums, and how you can save money even after
having an accident. Getting a good deal on auto insurance is hard enough.
Keeping your premiums from rising can be challenging, but we at Brownell
Insurance Center, INC are diligent to be sure you are getting a good deal
for your money by reviewing your insurance annually. Here are a few ways the
industry works, with tips to help you save $$$:
1. If you have good credit, you’ll pay less. Studies have shown a
direct correlation between your credit score and the likelihood that you
will file a claim. Tip: If you have unusual credit activity or activity that
you know is incorrect... you will need to correct it as soon as possible.
Work with the credit bureaus to improve your ratings. If your credit history
is shaky, clean it up.
2. Your car model affects your premium. The auto insurers have a
rating system for every car make and model. Tip: Look up your car’s relative
risk with MSN Money’s comparison tool or something similar. When buying a
new car, ask us about the difference in premiums for cars you’re
considering.
3. Pay in full to avoid installment fees. “Fractional premium” fees
are usually charged when you pay your annual premium in installments rather
than all at once. The more you break it down, the more those fees add up.
Tip: Ask us about fees for paying in installments. If the fees are small
enough, it may be worth it.
4. That Pearl Jam CD in your car isn’t covered. Stolen or damaged
personal items like compact discs aren’t covered by your auto insurance.
Tip: Most home-insurance policies will cover smaller, less expensive items
such as compact discs (subject to your homeowners insurance deductible).
However, if you carry expensive items such as computer equipment, ask us
about a rider to your home insurance policy.
5. Bad drivers will pay. The industry standard is to increase your
premium by 40% of the insurer’s base rate after your first at-fault
accident. Tip: Some insurance companies have a “forgive the first accident”
policy so ask us if it has a forgiveness policy and how to qualify.
6. You’ll pay for your friend’s bad driving. If a friend borrows your
car and crashes it, you’ll have to file a claim with your insurance company
and pay any deductible that applies. Your rates will probably go up as a
result of your claim. Tip: Best bet? Don’t lend out your car. |
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7. Your car’s real worth.
Auto-insurance companies have their own proprietary list of car values, and
most have specialized software for valuing cars in each region. Tip: If you
disagree with your insurance company’s value determination, there are
several things you can do: a. Present copies of your maintenance record to
the insurance company to show the car was in good condition. b. Make sure
any special parts or upgrades are included in the insurance company’s
evaluation. c. Get price quotes on replacement cars from three dealers
within a reasonable driving distance and submit these to your insurance
company. It pays to plan ahead. When you buy a brand new car, ask us about
“gap insurance.” It could save you thousands of dollars if you “total” your
car.
8. Check into “diminished value.” Say your car has been in an
accident, but repaired. Is it worth less than the exact same car that hasn’t
been in an accident? It’s a hot topic, but some say yes. In 14 states,
you’re allowed to file a claim with your insurance company for that lost
value. Tip: Thirty-six states and Washington, D.C., allow insurance
companies to exclude payments for diminished value, so if you live in one of
those states, you won’t get to claim the loss. If you weren’t at fault in
the accident, you often can make a successful case against the insurance
company of the driver who was at fault.
9. You can wait to add your teenager to your policy until he or she is
licensed. You are not required to add your teenager to your policy just
because he or she has reached driving age. Tip: Don’t forget to tell us that
you have a licensed teen. If you have to file a claim on his or her behalf,
your insurance company is entitled to charge you back premiums from the date
your teen received a license.
10. You must officially cancel your insurance policy when you switch
insurers. Your policy most likely states that you can cancel your
coverage at any time by notifying the company or us in writing of the date
of termination. Tip: Call us and let us know you are canceling your policy.
Give a specific date, or you may end up uninsured for a period of time. We
will send you a cancellation request.
Getting the most from your auto insurance - A Standard at Brownell Insurance
Center and always for the least money possible. Resources: Track Investments
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