Insurance premiums for automobiles seem to rise every year. When the annual notice of renewal arrives in the mail, there is often sticker shock at how much the premium has gone up. Is there a way to save money with discount auto insurance? The television advertisements for discount auto insurance appear to make it attractive, but is it a right fit for you?
There are three basic types of auto insurance, Liability, Collision and Comprehensive. These three types are defined as follows. Liability is coverage for damage done by your vehicle. Collision is coverage for damage done to your vehicle. Comprehensive is coverage for fire and theft damage. If you lease or have your vehicle financed, either through a bank or finance company, the bank or finance company will require you to have all three, which is considered "full coverage". If you own your vehicle outright, most states will require you to carry liability insurance only. However if your vehicle is involved in an accident you may have to carry the burden of repairing your vehicle if you do not have full coverage. There are numerous other types of coverage that are available to the insurance purchaser.
Prior to the 1990's automobile insurance agents worked directly for a particular company or as an independent broker. The independent broker represented several companies and in theory could compare the companies for you and determine which company fit your needs in the best manner. The advantage to using a local agent or broker was that a one to one relationship was developed between the agent/broker and the consumer. This provided a "security blanket" for the insured.
If a consumer was interested in changing coverage or agents, the process was often long and involved. Multiple phone calls had to be made to various agencies and repetitive answers had to be provided. This time consuming and often frustrating process dissuaded many from changing companies and or agents. It was often difficult for the consumer to compare policies and to insure that the "fine print" on all of the policies was the same.
In the late 20th century, insurance companies, recognizing the growth of the Internet created specific programs to allow consumers to get insurance quotes on line. This method of allowing the consumer to get a quote for a product allowed the product, insurance, to be offered at a discounted rate. The insurance company not having to pay a commission to the agent primarily generates this lower rate. Another factor in the ability to offer a discount rate for insurance is that by offering quotes on line, a greater number of customers can be attracted which allows for better economies of scale for the insurance company.
All auto insurance policies are not created equally. Many policies while appearing to offer comparable coverage may in fact have exclusions written into them. It is up to the consumer to, when purchasing discount auto insurance, on line carefully evaluate the policies and check for any exclusions in the policies. This can be a difficult task for the consumer who is not well versed in auto insurance.
When purchasing discount auto insurance, there are several factors that the consumer must be aware of. The first and foremost is that auto insurance is the same as any other product purchased. There are few people who will choose the lowest priced product, no matter what the product is. A recognized brand name often means a great deal when a product is purchased. If given the choice of a Sony plasma television and an ABC plasma television, many will choose the Sony at a greater cost over the ABC. This brand name acceptance often reflects the quality of product even if the cost is higher. Large nationally recognized auto insurance companies often have higher rates simply because they provide better more efficient customer service. If a claim is made to a smaller less efficient auto insurance company the claim may not be settled without extensive correspondence with that company.
Discount auto insurance is a viable alternative when budgets are strained. Everyone desires to save money and insurance costs appear to be an avenue in which to cut costs. When purchasing discount auto insurance, the consumer must be able to accurately compare and evaluate all facets of the insurance and know what the policies cover and what they don't. The company that the insurance is purchased from should be checked with the Better Business Bureau for their performance and any complaints that may have been lodged against them. If any doubt exists in the mind of the consumer, perhaps the best alternative is to consult a local insurance agent or broker and inquire about rates that they can provide. It is entirely possible that those rates are competitive with discount rates available on line. This provides the consumer the peace of mind that a professional has been consulted and both the policy and the insurance company fit the consumers' needs.
There are three basic types of auto insurance, Liability, Collision and Comprehensive. These three types are defined as follows. Liability is coverage for damage done by your vehicle. Collision is coverage for damage done to your vehicle. Comprehensive is coverage for fire and theft damage. If you lease or have your vehicle financed, either through a bank or finance company, the bank or finance company will require you to have all three, which is considered "full coverage". If you own your vehicle outright, most states will require you to carry liability insurance only. However if your vehicle is involved in an accident you may have to carry the burden of repairing your vehicle if you do not have full coverage. There are numerous other types of coverage that are available to the insurance purchaser.
Prior to the 1990's automobile insurance agents worked directly for a particular company or as an independent broker. The independent broker represented several companies and in theory could compare the companies for you and determine which company fit your needs in the best manner. The advantage to using a local agent or broker was that a one to one relationship was developed between the agent/broker and the consumer. This provided a "security blanket" for the insured.
If a consumer was interested in changing coverage or agents, the process was often long and involved. Multiple phone calls had to be made to various agencies and repetitive answers had to be provided. This time consuming and often frustrating process dissuaded many from changing companies and or agents. It was often difficult for the consumer to compare policies and to insure that the "fine print" on all of the policies was the same.
In the late 20th century, insurance companies, recognizing the growth of the Internet created specific programs to allow consumers to get insurance quotes on line. This method of allowing the consumer to get a quote for a product allowed the product, insurance, to be offered at a discounted rate. The insurance company not having to pay a commission to the agent primarily generates this lower rate. Another factor in the ability to offer a discount rate for insurance is that by offering quotes on line, a greater number of customers can be attracted which allows for better economies of scale for the insurance company.
All auto insurance policies are not created equally. Many policies while appearing to offer comparable coverage may in fact have exclusions written into them. It is up to the consumer to, when purchasing discount auto insurance, on line carefully evaluate the policies and check for any exclusions in the policies. This can be a difficult task for the consumer who is not well versed in auto insurance.
When purchasing discount auto insurance, there are several factors that the consumer must be aware of. The first and foremost is that auto insurance is the same as any other product purchased. There are few people who will choose the lowest priced product, no matter what the product is. A recognized brand name often means a great deal when a product is purchased. If given the choice of a Sony plasma television and an ABC plasma television, many will choose the Sony at a greater cost over the ABC. This brand name acceptance often reflects the quality of product even if the cost is higher. Large nationally recognized auto insurance companies often have higher rates simply because they provide better more efficient customer service. If a claim is made to a smaller less efficient auto insurance company the claim may not be settled without extensive correspondence with that company.
Discount auto insurance is a viable alternative when budgets are strained. Everyone desires to save money and insurance costs appear to be an avenue in which to cut costs. When purchasing discount auto insurance, the consumer must be able to accurately compare and evaluate all facets of the insurance and know what the policies cover and what they don't. The company that the insurance is purchased from should be checked with the Better Business Bureau for their performance and any complaints that may have been lodged against them. If any doubt exists in the mind of the consumer, perhaps the best alternative is to consult a local insurance agent or broker and inquire about rates that they can provide. It is entirely possible that those rates are competitive with discount rates available on line. This provides the consumer the peace of mind that a professional has been consulted and both the policy and the insurance company fit the consumers' needs.
About the Author:
If you liked this article you might like Joe's website where you can get more Discount Auto Insurance tips to help you save money when it's time to get Free Insurance Quotes. By following either link back to Joe's site you will save money on your auto insurance by comparing multiple insurance quotes from local agents and national companies
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