Evaluating Your Auto Insurance Policy

It may seem like half of the advertising we see is how we can save money on our Auto Insurance. But when it comes right down to it isn’t it more important that we optimize the dollars we do spend on our Auto Insurance policy?

There are carriers out there that want us to believe that every policy has the same coverage, and that all carriers provide the same level of service. That is not at all true. Some carriers require their policyholders to use the shops that they have negotiated labor costs below the marketplace. Do you want your auto repaired by a technician that is working for artificially low wages? Does that technician have the same skills and tools available as the standard technician? Does the shop take the same level of care as an truly independent shop?

There are policies available that have exclusions that could make certain drivers ineligible for coverage, leaving the damages to the policyholder.

Be careful about saving money on something as important as your Auto Insurance by buying from the cheapest carrier.

There are ways to save on your insurance and still get quality coverage and service.

First of all, Insurance Scoring has become a huge part of the development of premiums for Auto Insurance. Although Insurance Scoring is the factor hidden behind the screen and not comprehensible for most of us, some of the factors in Insurance Scoring include your credit score, your length of time in your current profession, length of time at your current residence, length of time with your current insurance carrier, and your current limits of liability.

The purpose of Insurance Scoring is to take the data that is available and to determine the probability of a loss and the probability you will remain a customer of that carrier for a long time.

Insurance carriers reward those that have a low probability of loss with better premiums because they predict they will pay out less in claims on the policies of those individuals.

Also, it is more expensive for an insurance company to write a new policy than it is to renew an existing policy. The longer you stay with the company, the less expensive it is for the carrier, and the better that carrier can predict your loss activity. That doesn’t mean you should never shop your policy, but since the premiums of the various carriers can sort of leapfrog each other, be judicious about your changes. Lifestyle changes are one good reason to shop. When your youthful operator get a driver’s license, there are carriers that are more Family Friendly in their premiums, same as when your children leave you as the empty nester. Some carriers are more senior friendly. A good Independent Insurance Agent can be extremely valuable to navigate these changes.

Statistics show that people who take care of their financial houses have fewer and less severe losses, so they reward them with better Insurance Scores, resulting in lower premiums. These people tend to take better care of their cars too, and bad maintenance can lead to accidents. They also tend to carry higher limits of liability, which reflects Social Responsibility.

Some common sense things you can do include carry the highest deductible that makes economic sense for your Comprehensive and Collision coverages, resist submitting small claims, take advantage of multi policy discounts by placing your Homeowners and Umbrella Liability policies with the same carrier, encourage youthful operators in the household to qualify for Good Student Discounts, and maintain safe driving habits that avoid tickets and accidents. Finally, talk to your Independent Insurance Agent about ways to keep quality coverage and service at the lowest rate.