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5 Steps to Cheap Auto Insurance

January 15, 2012 Auto Insurance Tips
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Finding and maintaining cheap auto insurance is no accident. It’s something that requires a little bit of knowledge, some research, and then some ongoing effort into the future.

5 Steps to Cheap Auto Insurance

5 Steps to Cheap Auto Insurance

Below are five steps to cheap auto insurance that are virtually guaranteed to help you save money. But before we get to them, it’s important to know how insurance companies determine your premiums.

Most of them use a rather complicated formula which factors in several things:

  • make, model, and book value of the car being insured
  • the state and local area you live in
  • age and marital status
  • driving history – including accidents and violations

Step #1 – Know State Requirements

The first step in finding the best deal on car insurance is to know what the minimum requirements are. Every state in the union requires some sort of insurance, be it through a licensed provider or a means of self-insurance, and companies will generally charge roughly the same rate for the minimums. Once those requirements are met, anything else added to your policy is an “extra”. And the extras are where the rate differences lie.

Step #2 – Compare Companies

The next step is to begin looking online and/or making phone calls to compare one policy with another. But make you’re doing what’s known as apples-to-apples comparisons. In other words, if the first policy you investigate includes the state minimums plus full collision and glass, make sure the second and third policies are either exactly the same or as similar as possible. Online comparisons tend to be the quickest and easiest way to do this.

Step #3 – Pay the Policy in Full

Very few people realize that their credit rating plays into how much they pay for insurance. Yet, if you can pay for your entire policy up front, the insurance company will not be concerned about your credit rating or your ability to pay. They will have their money and you will get a lower rate because of it.

Step #4 – Avoid Accidents

It’s a fact of life that car insurance is all about risk. Whenever you have an accident you pose a greater risk to the insurance company that they will lose money on your policy. That’s why accidents cause our rates to go up. Drive safely at all time to avoid accidents. This is one of the best things you can do to keep your insurance rates low.

Step #5 – No Violations

Just like accidents, violations will cause your insurance premiums to rise. Serious infractions, such as DWI or leaving the scene of an accident, can cause you to be placed in a special high-risk pool with substantially higher rates. They can even result in you being dropped from your current car insurance company, so avoiding tickets and violations is a smart idea. If you already have some on your record, keep a clean slate from this point forward and eventually they will be taken off your record.

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Four Steps to Comparing Insurance Rates Before Buying a New Car

June 28, 2011 Auto Insurance Tips
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June 27th, 2011 jess Posted in Insurance Rates | No Comments »

If you are looking to buy a new car insurance plan, you want to make sure that you do not pay too much money for it. Every year, people pay far more than they should for the coverage that they need. They will pay hundreds of dollars more to one company to get the exact same coverage that they could get from another company while saving their money. This happens simply because people will buy the first type of coverage that they see, not taking the time to do the necessary research. If you consider the following things before you buy, you can compare the rates and get a good deal.

1. Shop Around
The most important thing that you can do is to avoid that trap of buying a policy from the first company that you find. This sounds obvious, but people do it all of the time. They let their feelings of urgency win out over their feelings of common sense. You want to look into at least three different policies with three different rates. If you have the time, you should look into around ten. Shopping around will give you a feel for the market so that you can know what is a good price and what is not.

2. Look at the Discounts
Some companies may have a high base rate and then give you many discounts. Others might give you a low base rate but then refuse to take anything off it for those who deserve it. If you are a good driver, you should look into these companies that offer discounts. You can probably qualify for a few of them. There might be a discount for having multiple cars or there might be one for having good grades in school. There could be others for driving a low amount of miles every year or staying out of accidents.

3. Look at the Types of Coverage
Another thing to keep in mind is that different types of coverage are more appropriate for different cars. When you are comparing rates, you need to compare all of the different types. If you have a brand new car, you might need comprehensive collision insurance. If you have an older car, you might be able to get by with the base level of coverage. Make sure that you compare all of these to see which plans give you the most coverage for the least money.

4. Keep Your Rates From Rising
When you are comparing, you also want to see how much the rates will go up in certain situations. If you are involved in an accident, your previously cheap rates might jump through the roof. The same could be true if you get a ticket. You want to avoid these situations to keep your rates from rising. To be safe, however, you should see which companies would increase your rates the least. These could prove to be a better deal in the end.

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