Auto Insurance - we all have to have it, and we all hate paying for it. If you're a licensed driver living in California, you're likely paying anywhere from $100 - $300 per month for your auto insurance. This article will cover the basics of shopping for insurance.
When is the last time you've shopped your insurance?
The insurance industry, much like any other industry wrapped up in bureaucratic mumbo-jumbo, is constantly changing their regulations. These changes often times have a direct impact on what an insurance company is able or required to charge their clients. Because of the dynamic nature of insurance rates, it is wise to evaluate what you're paying for insurance on a yearly basis. Remember, just because your insurance carrier had the best deal last year doesn't mean that they still have the best rates on the market. Also, please realize that the cheapest insurance DOES NOT necessarily make it the "best deal"... we'll cover that a little later.
What should you keep in mind when shopping for auto insurance?
First, understand that all insurance companies are not geared toward having good rates for all drivers. For instance, company A may have great rates for people in their 40s and 50s, but have mediocre rates for people outside of that age bracket. Likewise, company B may have great rates for drivers in their 20s with 4 DUIs on their record, but cost twice as much as company A to insure people in their 40s and 50s. Because of the differences in companies' rating structures, there is no "magic" company that has the best rates for all drivers. This is why you'll need to get on the phone and do some shopping.
Second, don't just look at your monthly payment. Just because company A is $90 per month, and company B is $100 per month, doesn't necessarily mean that company A is cheaper. Company A may have a higher down payment, lower limits of coverage, or may be charging a broker fee on top of your first payment. Because of these variables, I always recommend that you ask for a faxed or emailed copy of the quote. Brokers, if charging a broker fee, are required to advise you in writing of the broker fee amount. Don't be afraid to ask if they are charging a broker fee, and if so, how much they are charging. In my opinion, any broker fee over $100 on an auto policy is unfair to the consumer.
Third, the quality of the insurance company is important to know. You should always be sure to ask what rating an insurance company has. Most companies have an "A" rating. The rating is given by a third-party company that evaluates insurance companies' financial standings and ability to pay claims. You can always check a company's rating yourself by visiting http://www.ambest.com/
More Crunch to Munch On:
So what have you learned? To recap, you should shop your insurance on a yearly basis; just because you had the best deal 12 months ago, doesn't mean something better hasn't hit the market. Next, there is no "magic" insurance company that has great rates for everyone. While shopping, don't just look at monthly payments... down payments may vary drastically from one company to another. Last, but not least, know what you're buying. Check out the insurance company's rating before you make any payments.
David Harriman is a licensed insurance specialist in Los Angeles, California. Smile, he's here to help! Contact him at: www.HarrimanInsurance.net