Posts Tagged ‘car insurance rates’

Do I Need to Pay for My Auto Insurance Coverage in Advance

Saturday, February 18th, 2012

Auto insurance buyers who are looking for the best way to budget for their payments may be wondering if they need to pay for auto insurance coverage in advance. While a policyholder can pay for coverage for the entire term in advance, insurance companies do offer other payment options to their customers.

Consumers need to be aware that paying for auto insurance in installments may mean paying extra administrative or other fees to cover the higher cost of processing multiple payments. Each person buying the policy will need to consider whether the convenience of paying for coverage over time is worth the added expense which may come with this choice.

Auto Insurance Payment Options

Each auto insurance company decides on its payment policies independently. All of them allow a policyholder to pay for the full amount of his or her premium when the policy is issued. Since not all consumers can afford to pay for six or 12 months’ worth of coverage at once, companies offer other options to their customers.

An auto insurance buyer who chooses to pay for his or her coverage in full may be given a discount, depending on the insurance company involved. New customers would need to make this payment by the policy effective date. If the policy is up for renewal, the payment must be made at least one business day before the renewal date.

Another option available to auto insurance buyers is a budget payment plan. With this method, a driver can pay for his or her auto insurance coverage in two or more installments. One example of the way that this payment method can be set up is that the policyholder pays 50 percent of the premium by the policy effective date. The second installment for the remaining 50 percent of the premium is due 30 days after the policy effective date. The policyholder may be charged an administration fee on top of the face value of the premium to reflect the cost of processing multiple payments.

Some drivers prefer to pay their auto insurance on a monthly basis. This choice can help with cash flow because the total amount payable for coverage is spread out over six or 12 months. The insurance company will take the amount of the premium for the term requested, add an administrative fee, and then divide this amount by the number of months in the term to determine what the monthly payments would be. A policyholder may need to make a down payment to the insurance company if he or she wishes to use this payment option.

Auto Insurance Payment Methods

Customers can choose to have their premium amount automatically withdrawn from their bank account on an agreed-upon day each month. Insurers also offer the option of paying the premium by telephone for online banking. Paying by mail or going to a customer service center to make a payment in person is another option available to auto insurance buyers.

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Posted in General Auto Insurance |

How Does My Credit Rating Affect Auto Insurance Premiums

Sunday, February 12th, 2012

A number of consumers may be wondering how credit rating affects auto insurance premium rates. In some states, an insurance provider can look at an applicant’s credit score as one of the criteria it uses to determine the amount of risk that a particular driver presents for coverage purposes.

Policyholders who miss a couple of payments on a credit card may find that they are paying higher rates for coverage. In some instances, the insurance company may even refuse to renew the policy or cancel it outright. At first glance, it may appear that auto insurance rates and credit history don’t have very much in common, but the companies writing policies reserve their best rates for customers whom they feel are the least likely to be involved in accidents.

Auto Insurance Companies and Credit Score

Insurance providers who use credit history as part of the process of evaluating applicants for coverage purposes consider people with high credit scores to be more responsible than individuals who have had credit issues. An argument can be made that people who have run into financial difficulties due to illness or unemployment are not necessarily going to be irresponsible while driving and that during tough economic times there will be more people who find themselves in this situation through no fault of their own.

Improve Credit to Qualify for Better Auto Insurance Rates

Drivers who are facing higher auto insurance rates due to their credit history can take steps to improve their situation. One thing that all drivers can do is to order a copy of their credit report. This information can be obtained once a year, at no charge, from each of the big credit reporting agencies.

Review the information contained in the report carefully and make note of any errors in it. If an error is found, a consumer can write to the credit reporting agencies to request that it be corrected.

Paying current bills on time will help to improve a driver’s credit score over time. Arrange to pay down old debts which are driving the score down.

A driver who does not have a credit history may also be facing higher rates when he or she is looking for auto insurance coverage. It’s a good idea to establish a credit history by applying for a credit card with a low limit and making the payments on time for several months before applying for auto insurance coverage.

Get Quotes from Several Auto Insurance Providers

To find the best prices on auto insurance coverage, consumers should make a point of shopping around. Credit history is only one factor considered when the company sets rates, and not all of them will give it the same level of importance. Most companies consider a person’s driving history as the most important factor when deciding how much to charge for coverage. Making a point of getting quotes from several companies will reveal which one can offer the best price for the coverage that a particular consumer needs.

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Posted in Auto Insurance Rates |

How Much Will I Have to Pay for Auto Insurance Coverage

Friday, January 27th, 2012

The question of how much you will have to pay for auto insurance coverage is a very common one among consumers. There is no single answer to this question, however, since rates are determined based on a number of factors. Each company sets its own rates for coverage as well, which means that a driver will see a range of prices for the same type and level of auto insurance from different providers.

Auto Insurance Rates and Risk

When auto insurance companies are setting rates for policyholders, they do so based on the level of risk that an applicant presents. Each driver who applies for coverage is evaluated and placed into a category for car insurance purposes. All drivers in the same category share similar characteristics, which allows the insurance company to set pricing for a large group of consumers.

Insurance companies also vary in the amount of risk they are prepared to assume on behalf of their policyholders. Some companies have a very low tolerance for risk and as a result, will either refuse to provide coverage to drivers are more likely to be involved in accidents or charge higher rates to policyholders in this category.

Factors Which Determine Auto Insurance Rates

When an auto insurance company is setting rates for its policyholders, it considers a number of factors, including the following:

  • Driver’s age and gender
  • Driver’s marital status
  • How long driver has been licensed
  • Where the driver lives
  • Make and model of the vehicle
  • Annual mileage
  • Type and level of coverage requested

The insurance company will also look at an applicants driving history as part of the underwriting process. Drivers who have been involved in accidents or who have accumulated moving violations are more likely to repeat these events and make claims against their policy. Since the insurance company wants to evaluate the level of risk that a driver presents, people who have already been involved in an accident are rated higher than individuals who have been licensed for several years and have maintained a clean driving record.

Discounts Available on Auto Insurance Coverage

When shopping for auto insurance coverage, a driver should make a point of asking about the type of discounts which the company offers. It is possible for a driver to qualify for more than one discount on his or her coverage.

One of the most common price breaks offered by auto insurance providers is a good driver discount. Companies reserve their best rates for drivers who are accident and claims-free.

Buying a homeowners and auto insurance policy from the same company is another way to qualify for a discount. A number of companies offer multi-policy discounts to customers, and they may even give preferred pricing to policyholders who insure more than one vehicle.

Buying an insurance policy online is another way to save on coverage costs.Filling out an application electronically means lower administrative costs for the company, and the savings are passed on to the customer.

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Posted in Auto Insurance Rates |

Can I Negotiate with My Auto Insurance Company to get a Lower Rate

Wednesday, November 16th, 2011

Drivers who have received a renewal notice from their auto insurance provider may be wondering if they can negotiate with the company to get better coverage rates. Unfortunately, an insurance company is not an entity that you can bargain with to get lower rates. Consumers do have the option to shop around to try to get better pricing from a different company though, and it’s a good idea for drivers to review their coverage at least once a year and to get quotes from several providers before renewing the policy.

How Insurance Companies Set Rates

Each insurance company licensed to sell policies uses a proprietary formula to determine how much to charge its policyholders. The rates that it charges for coverage depend on a number of factors, and companies vary in the level of risk that they are prepared to assume on behalf of their policyholders.

Companies look at similar factors when setting rates for customers, but the weight they give to each one varies. When you apply for auto insurance coverage, you can expect the insurer to consider the following:

  • Age
  • Gender
  • Marital Status
  • How long driver has been licensed
  • Make and model of the vehicle
  • Driving record
  • Annual mileage

Shop Around for Best Auto Insurance Rates

To get the lowest rates for auto insurance coverage, drivers should get quotes from at least a few companies before choosing where to buy a policy. Make a point of starting to search for coverage a couple of months before the existing policy is up for renewal to give yourself enough time to gather quotes and make your choice.

Going online is an easy and convenient way to find the best rates for coverage. A number of companies offer quotes from their web sites, and visiting individual ones will help you get a feel for whether a certain provider is right for you.

Along with looking at rates, you will want to consider whether the company has the financial resources to pay out on its policyholders’ claims. A number of companies share their rating online, and choosing one with an A+ or A designation means the provider will be able to meet its financial obligations.

Good customer service practices are also important to auto insurance buyers. The company you choose should be one which has customer service representatives available to answer questions and deal with concerns that policyholders may have. The right auto insurance provider will also be one which settles claims promptly.

If you know what type of coverage you need and you get insurance in place quickly, consider checking out a site which can offer pricing from several companies at once. The advantage to choosing this option is that it is less time-consuming than visiting multiple web sites to get prices for your coverage. You would only need to input your information once to receive prices from a number of reputable companies licensed to sell policies in your state.

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Posted in Auto Insurance Rates, USA |

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