Vehicle owners are generally required by law to carry auto insurance to protect their assets and to pay for damages they might cause. Since a majority of Americans own a vehicle, buying car insurance is something many of us go through. Even though you’re required to buy the coverage required by state law, you’re free to shop the market for the best policy from the right insurer. In fact, comparison shopping is the most effective way to get affordable auto insurance rates.
While the auto insurance marketplace is a competitive one, it’s also regulated. With a department of insurance located in each state in charge of regulation, you can feel at ease that your consumer’s rights are protected. Even so, you need to take the time to learn about your consumer rights and what insurers don’t want you to know so that you can save money on your rates.
They Know Usage Affects Rates
You might think agents are just casually asking you about your driving habits, but every answer that you provide has an effect on how much you pay. Auto insurers use three usage classifications that all have a different effect on a base rate. The classifications in order from lowest cost to highest are pleasure use, commute, and business use. Be sure that you’re honest and you update your policy if you retire, leave your job, carpool, or work from home.
You Can’t Be Charged for Double Coverage
If you’re not happy with your current insurer and you’ve found a policy that’s much cheaper, you might be worried about switching before the term is up. What your old insurer won’t tell you is that you’re free to cancel your policy at any time and the insurer has to honor your request. This is because you can’t legally have double coverage because of the risk of unjust enrichment or double claims payments.
You Don’t Have to List Occasional Drivers with Their Own Insurance
Have you ever worried about letting someone in your home borrow the car when they are not on your insurance. Insurance companies are more than happy to charge for all drivers possible on your policy, but they won’t tell you that the driver could be carried under the permissive use provision. If that person isn’t living in the household, or they have their own insurance policy, you don’t need to add them as a rated driver.
Insurance Companies Already Know About Your Claims History
When you’re applying for coverage and the company asks you if you’ve had a damage claim or a personal injury claim in the past, the truth is they already know the answer. It’d be nice if companies used the honor system to calculate rates, but there are several electronic databases a company can access to look into your claims experience and your driving record. Be honest and you don’t have to worry about misquotes.
Companies Already Know the Safety Record of Your Car
Companies base rates on a vehicle’s safety rating and on how much a car costs to repair. If you’re buying a car, the safety ratings and the symbols assigned by the insurer will be used to calculate the potential rates for a specific car. If you want to find the best deal, be sure to price the cost of insuring a specific car first before you sign a sales agreement.
Accidents can affect your rates as well. After you’ve been in an accident your insurance company might send you a settlement offer to sign. An Austin TX car accident lawyer recommends you don’t sign anything until you’ve checked with your attorney and made sure the settlement is fair.
Carriers Know How Your Car Will Be Valued
Not everyone needs to carry full coverage on their vehicle. You should know that the value you place on your car isn’t the same as how the company values it. Companies use fair market value when determining how much to pay to repair a car. If the value is low and the cost to insurance the car is high, carrying full coverage might not be feasible.
Insurance companies are in business to make money. You need to know how certain factors affect your premiums before you pay more than you need to for your coverage. Keep all of this in your mind as you shop for coverage and you can be a wise consumer with all of the buying power.
