CityAutoInsurance

This is another way to say WHERE YOU LIVE. If you live in the city, your rates will be higher. If you live in the country, your rates will be lower. The more cars and people around where you live, the higher your rates will be. More people and more drivers equal more accidents and vandalism etc. Now that you know this, do not try to fool the insurance company. Some people actually list false addresses to take advantage of lower rates. If the company finds out, however, they may choose to not pay a claim for you. If you are responsible for $100,000 worth of damage and the insurance company discovers your committed fraud, you may be I for some BIG trouble. I am mentioning this because in 20 years, I have discovered MANY scenarios of folks lying about their address…don’t do it.

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If you have kids, or YOU are under 25, then you know how much these discounts mean to you. They are like GOLD! Well, like money anyways. Drivers under 25 are a huge risk. Many more accidents, tickets, injuries, for this population than any other age group. In fact, as of the creation of this ebook, the number one cause of death for teenagers is…driving. That is a HORRIBLE statistic, but a factual one. I urge you, if you are a parent reading this, take your child’s driving seriously. They need to be safe and take the responsibility seriously.  Because of the fact that younger drivers have so many more incident, their rates are much higher. Having a 16 year old insured on a brand new vehicle with full coverage can be incredibly expensive. However, if the younger driver demonstrates that they are less of a risk, the insurance company with reward them with lower rates. How can they demonstrate that they are a lower risk? First of all, don’t speed. No tickets on the record is a great start. Some companies have their own safe driving program for new and younger drivers as well. Watching a video and filling out a driving log with their parents are just two common aspects of such a program. Once it is completed, it shows the effort of the younger driver to take this responsibility seriously. Here is the kicker: Oftentimes this discount is not even eligible to achieve if the driver has ANY infractions. No tickets, no at fault accidents, NONE. What if an insurance agent asks to see your child’s report card? Well, if they get good grades, let them! They could be eligible for a good student discount! It turns out, younger drivers who get a “B” or better average in school have much safer driving habits than those students who do not perform as well. I have found, that if a new parent makes his child pay for at least part of the insurance premiums, and they show them how much less they would be paying if they were able to get this discount, their grades dramatically improve. To sum up, clean driving record, safe driving program, good grades all add up to much lower premiums.

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Nowadays, these discounts are already figured into the premium based on the VIN number. You may not be able to see the exact discounts you are

receiving based on the safety of the vehicle, but rest assured, if you bought a consumer reports safety rated vehicle, your premiums will reflect your wise purchase. Front and rear airbags, side airbags, anti-lock brakes, strength tested bumpers, all of these features result in lower overall premiums for your vehicle. The less damage your car is likely to sustain during an accident and the less likely a passenger is to be injured are the reasons for these discounts. If the accident costs less to settle, the insurance company is happy.

If your vehicle is older, let’s say early 90’s, make sure to go over some of the safety features of the vehicle. Sometimes, these discounts have to be manually added to the policy so that you are paying the proper premium. Automatic seatbelts, air bags, and anti-lock brakes can make a difference, so be sure to ask your agent if they apply to your situation.

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Are you someone who wants to shop their insurance at every renewal to see If you can save a few dollars? Well, if so, you want be able to get this discount. Some companies reward policyholders for being longtime customers.

They are happy to have built a relationship with you and want to show you their appreciation. Sometimes, these discounts can be significant, and the value of the relationship itself is certainly worth a few dollars. If you are in a serious auto accident and your car is totaled,

would you rather deal with the discount insurance shop, or the agent who  has taken care of your insurance needs since you began driving?

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Simply put, drive safely, pay less. Having a pristine driving record can help you in the insurance game in several ways. For one, you will pay lower rates with your existing company. Most companies have some type of discount built in for perfect driving records. At the very least, they start with a certain rate and just add premium with each infraction or incident. Secondly, keeping your driving record clean will allow you the ability to switch to different companies to take advantage of lower rates. This is MUCH harder to do when you have blemishes on your record. Most companies are NOT looking for drivers with tickets and/or at fault accidents. Many folks make the mistake of threatening to leave a company because their rates went up, not realizing that it was their 2 speeding tickets and their at fault accident that caused it. These folks find oftentimes that they cannot leave their current company because no one will insure them. This is not a good place to be. The better your driving record, the more choices you have and the lower your premiums will be.

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Another cool discounts that many insurance companies offer is a multiple line or multiple policy discount. This differs from the multiple car discount in that they are rewarding you for having different types of insurance with the same company. For instance, just having your auto insured would be one price, but if you added homeowners insurance, your auto rates would go down. In SOME cases, the  discount you receive on your auto could actually pay for the cost of the additional insurance. It is rare, but it does happen.

For instance, let’s say your auto policy is $1200 per year. If you are a renter, your renters policy might only cost you $140 per year. By adding the renters policy, your auto policy might actually go DOWN by $145 per year. VOILA! YOU just SAVED $5 by adding a renters policy!

Now, some folks might say “That is stupid, why would I care about $5?” Well…smarty pants, $5 might not be a lot, but now all of your personal property is insured….uhhh…you shouldn’t really have to explain why that makes sense, but sometimes, I still do.

The REAL question is, how can the company make money by allowing me to pay LESS for adding additional policies? Good question.

The answer? The company is betting that since you now have more than one type of insurance with them, you will stay with that company much longer. Here is an easy way to look at it. If you only had one auto insured, switching companies would not be that much of a hassle. Now, if you had an auto, a homeowners insurance policy, a life insurance policy, and a disability income policy, well, that would be a little more of a chore.

The more insurances you have with a particular company, the more likely you are to stay there. This is generally a good thing. The better your relationship with your agency, the more likely you are to be notified of potential discounts, times when your policy payment is late, hear about additional policies that may benefit you and your family and more. It pays to get to know your agency and agent. If you choose a brokerage or purchase insurance online, you are merely interested in price. Price IS important, but it is merely one factor that goes into determining what is the best value and situation for you. More on that later…

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Some companies give you a discount for having more than one car insured with their company. This can be a pretty significant savings, but is certainly no reason to go out and buy another car…sounds silly, but I have had that question before. For most, it makes sense to insure all your cars with the same agency or company, but newly married couples for instance sometimes are stubborn about making such switches.

I always encourage folks to put everything into the office where they have the best  relationship intact. The savings for multiple cars is often similar with various companies,  ut having that relationship is often a key and extremely valuable deciding factor. One mistake folks make is that when they get a new vehicle or vehicles, they choose different coverages for the newer policies. Makes no sense. If you have an accident, you want the best policy.

Take your time, follow the advice given here, speak with an agent, and choose a policy with solid coverages. Then, when you get additional vehicles, make all the coverages the same.

One scenario in which mistakes occur is when someone is trading in an older vehicle for a newer one. The older car may have not had full coverage. If it was paid off, and was not worth much, this is likely. Once the agency does the car change, you will probably want to upgrade your coverages, ESPECIALLY if your car has a lien. Make CERTAIN that you get copies of this new policy reflecting the additional coverages. The lienholder will notify you if you don’t.

When you do have additional vehicles insured, make sure that you get copies of any changes you make. If you have to go to your local Motor Vehicle Department for any reason, once you are there is NOT the time to find out that someone made a change to the WRONG car in your household. Get copies of any changes, and make sure the company mails you a new policy.

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Deductibles. A woefully misunderstood feature of your car insurance policy. Oftentimes, an incredibly valuable one, but, what the heck is it? Well, basically, a deductible is the amount DEDUCTED from what your insurance policy would pay in the event of a covered claim. You are basically self insuring for a fixed amount.

Here is an example: Your collision deductible is $500. You get into an accident that is YOUR fault, and it will cost $1500 to fix your car. The insurance company pays $1000, you pay $500. Ok, so now you say “I guess it makes sense to have the smallest deductible policy possible so the policy pays as much of the claim as possible, right?” WRONG! This is where people go wrong all the time. The policy, and insurance does not work that way.

The goal of insurance companies (and YOU as well once you realize how insurance works) is to have the insurance companies pay as little as possible for claims. The more money that is paid out in claims, the less money the company has in Reserve . If the pot gets too low, they may haveto raise rates to get money back in the pot to pay future claims. Make sense? So…if folks can make smart insurance decisions, we can all help to keep rates low for EVERYONE. Let me put it in perspective for you: If everyone had high deductibles, and did not turn in small claims, insurance rates would be A LOT lower.

Most people have the wrong idea that insurance is there to give you money if you have an accident. Well…KINDA. It is really designed to help us out in situations that would otherwise be financially devastating. I hardly think that your scratching your car while backing out of the garage and getting a check from the insurance company for a whopping $100 qualifies. However, that is EXACTLY what would happen if you had a $100 deductible on collision, and you caused $200 damage to your car that was your fault. Now, multiply that scenario THOUSANDS of times, and you see where the problem lies.

HERE is how you can save money on your car insurance, save your claims history, and help to keep costs down for everyone. Listen up, this is a biggie…if you only that this lesson away from reading this, it will be worth the price of admission.

1. Make your deductibles as high as you can afford to (applies to COLLISION coverage)-If you have some savings set aside, and can cover a higher deductible in case something happens, then raise your deductible! The higher it is, the cheaper your insurance will be! ALSO, the less money that the company pays out in case of a claim that is your fault, the less your rates will go up. Keep in mind, if you are paying a deductible for collision, it means YOU were at fault, and your insurance premiums may take a hit. Lessen that hit by paying some of the claim yourself in the form of a higher deductible. The bottom line is this, when you have a low deductible, you are paying the insurance company MORE for your insurance because you MAY have an accident one day. Drive safely, raise your deductible and YOU control your money, not the insurance company.

2. Once you raise your deductible, put that savings back into your BUDGET, not your pocket!-When you save money on insurance, but that savings somewhere else in your budget. The best place may be savings, so you will have that money set aside if something ever DOES happen.

3. If you have a small accident, and there is minimal damage, get an estimate first, you may not want to turn in the claim-I will go over this in detail in the CLAIMS section later, but it is worth mentioning here since it does pertain to  deductibles. Sometimes, folks are too quick to call their insurance agent when something happens. A lot of times, your call is reported to claims even if you DON’T end up filing the claim and getting paid. If you have an incident, it does raise your risk level, even if it is small. Personally, I would rather give someone good advice then turn in every small thing they ever did. I recommend people get estimates for small things, ESPECIALLY when it is only their own vehicle involved. Let’s say you backed out of your driveway and hit your  ailbox. The rear of your car is scratched. Your deductible is $1000. If you call your insurance company to turn in that claim, here is what happens:

• a. You now have an at fault incident on your claims record
• b. You COULD lose a discount because of having 0 accidents on your record
• c. You have to start a process that is tedious and even if well intentioned, is simply not fun.

Here is an alternative scenario:

• a. Get an estimate
• b. Decide if you want to fix yourself, not fix at all, or turn in the claim

See, you have options!

If the damage costs only $900 to fix, and you have a $1000 deductible, then no call to your company is necessary! Fix it yourself, or don’t, you decide! Your clams history remains clean, your rates won’t go up, and you can takecare of the problem at your leisure, very simple! Ok, the advice above only applies to Collision deductibles, Comprehensive is the opposite, make the deductible as LOW as you can. Why?

Simple. A Comprehensive claim will generally not go against you in any negative way. The situations themselves are not your fault so why would you want to spend money to fix them? ALSO, The coverage is generally less expensive than collision, so you don’t save much at all by having a higher deductible. Examples: 1. A rock hits your windshield. You have a $500 Comp deductible. YOU pay for the windshield! 2. You hit a deer with your car, $500 deductible, damage is $2000, you pay

$50company pays $1500 3. Someone keys your car, $500 deductible, damage is $1000, you pay $500, company pays $500

Ok, in the scenarios above, how happy to you think you will be having had to pay ANYTHING out of pocket? Especially considering the claim won’t go against you anyways? Answer? You will be pissed. You would MUCH rather not pay anything out of pocket if the claim is NOT your fault, won’t go against you, and you won’t  save much money at all by even having a deductible. Having FULL COMPREHENSIVE, in other words, $0 deductible on comprehensive makes the most sense. Check it out with your agent or company. I think you will agree…

Uninsured motorist coverage usually has a deductible attached to it if you have to use this coverage. Nothing you can change about this one.This has been explained to me that this is because of fraud and helps to offset the cost of folks saying they had a hit and run, but really damaged the vehicle themselves. Yes, shocking as it is, sometimes people lie to insurance companies.

Guess what? You and I pay the premiums for their lies…ALSO, the deductible helps offset the cost of even having to pay the claim for any reason. If someone doesn’t have insurance, but is at fault, and your policy pays, the premiums you paid for this coverage, coupled with the deductible, help to alleviate the financial burden on the company. Bottom line? Make your collision deductibles high, premiums will go down, save the money. Make your comprehensive deductibles low, don’t be afraid to turn in those claims.

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No Fault, by definition, simply means that your policy would pay for you no matter who was at fault for an accident. As stated before, many states have a NO FAULT feature on their policy, related to medical coverage, but some states have NO FAULT total policies. This simply means that the whole accident will be covered by YOUR insurance policy. The other person’s would take care of their claim. This includes medical coverage and damage to your vehicle. As of the writing of this ebook, the following state are considered NO FAULT states:

Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah. In addition to how claims are settled in no fault states, there are also provisions that limit the lawsuits filed against the at fault drivers as well. Most no fault states limit your ability to file a lawsuit except in only the most severe of accidents. There are a few states, however, that have taken this provision away, and allow lawsuits even for smaller incidents. Because of the varied and complex nature of these laws, I ask that if you live in a no fault state and you want to know exactly what your rights are, visit with your insurance agent, company, or a qualified attorney. My best advice is, again, if your policy is covering you and your family, don’t skimp on the coverage to try to save money. You may end up costing yourself thousands and thousands of dollars if you are involved in a serious accident.

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It is not fun to talk about, but it does happen. This coverage can give your family money if you die in an accident. It can also give you money if you lose a limb. The amount of coverage can vary, so again, be sure to ask your agentor cpaand if you do, what is the amount of payout.

I really have not sold this coverage very much. I have no problem with it, but since the total coverage is fairly small, I have seen people get a false impression of being protected because this coverage is on their policy. I have even seen people choose not to get additional life insurance because they had this supplemental coverage on their policy.

A HORRIBLE idea. This coverage only pays if you get into an accident. I recommend folks get their own life insurance policy, and a disability income policy as well. That is a subject for another ebook though, so I will digress. Suffice it to say,  this coverage is usually not very expensive, but it does not usually provide a lot of coverage. Personally, I do not have this coverage on my policy, but you may feel differently.

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