Compare Auto Insurance
Well done getting all those freebies and discounts your agent enticed you with, to choose their Auto Insurance company for your policy needs.
Often you can get better auto insurance discounts and added savings with a little information, a dose of common sense and a little understanding of finance and insurance language. It is a good idea for you to spend a little time studying the different nuances of automobile liability insurance. When you understand deductibles and exclusions for example you may find ways to get more discounts and savings.
You will also know if you are being misled or not communicating with your agent concerning the provisions of your auto insurance policy. For example you will know if you really have coverage for towing and rental reimbursement. With a little knowledge you will save yourself time, money, frustration or any combination of these. Consider that some insurance companies offer multi-vehicle discounts. You might actually be able to insure four cars for less than you were insuring three. You ask, "How can that be"?
Let's say you have an auto insurance policy carrying three cars. You have a full coverage policy (comprehensive, collision, and liability coverage.) Add to that a young 17 year old male driver. If you were to add a fourth vehicle, with only liability coverage, and make your sons primary vehicle that one; your rates could be reduced. Understand if you cancel the coverage on that fourth vehicle your rates will go back up. That was an example of why you should take time to educate yourself about liability insurance.
Some avenues to savings’ only require a bit of common sense in order to save money. This next scenario is all too common with insurance customers. The question is if it is better to pay the full premium payment or make a down payment and several monthly payments to pay off the premium. Let's say you have chosen an auto insurance policy that has a premium of $592.oo Your first payment option is to pay the entire annual premium of $592.00 Your other option is to pay a down payment of $165.00 with a remaining balance of $427.00 to be paid with 4 monthly payments of $114.64 for a total of $623.00.
The financial services industry is one of the highest regulated industries. Banks and insurance companies are part of the financial services industry. State regulatory boards are responsible for the rules insurance companies live by in their state. These boards dictate the maximum charges consumers will have to pay for paying their premiums on a periodic chart (for example monthly payments.).
The state of Illinois has set the maximum nominal interest rate for outstanding balances at 10%. But, the law also allows the insurance company to charge a "setup fee" up to $40.00, per contract. That means if your insurance contract is for six months you could get charged an extra $80.00 per year. Our previous example has our customer paying $31.56 extra. That’s a $20.00 set up fee and $11.56 in interest just for choosing a payment plan. Paying the extra $31.56 may not look too terribly bad, but consider that when you compute the costs compared to the original $427.00 The APR is close to 43%. Would you ever pay 43% interest on a credit card?
Yet one more consideration is additional fees are allowed to be tacked on to your bill. There are late payment charges, contract reinstatement charges, extra fees if you pay by credit card or check by phone. In our example policy the fee for each of these is $15.00. So, let's say you missed a payment for one reason or another. You would have a late fee of $15.00. Plus, the company would have to reinstate your policy, another $15.00.
And consider you probably noticed the oversight and called to fix the problem; another $15.00. $45.00 later you are back up and driving, not quite as far since you donated your gas money to your insurance company.
The best financial advice is for you to make full payment on your auto insurance policy if at all possible.
Your reward will be even deeper discounts, no cancellation notices, and a whole lot of peace of mind knowing you are insured. Auto Insurance.
