▷ How auto insurance works
If you were to compare auto insurance with any other type of insurance, you’d notice that most insurance is pretty much the same. Insurance companies collect premiums from a large pool of customers and pay out expenses when successful claims are filed. The probability that the paid premiums of customers will outweigh the expenses of customers is what allows people to obtain better financial protection and coverage versus what they can individually afford. There are many companies that allow you to obtain auto insurance online, and many of these companies also allow you to compare auto insurance rates. If a person was to compare auto insurance rates between different companies, they would realize that price ranges and coverages vary widely. It is important to shop around and get the most affordable deal for your situation.
Different states have different mandates for carrying insurance. New Hampshire is the only state that has non-compulsory insurance, which means all the other states have mandatory minimum requirements of coverage a driver must meet. Although many companies will not allow you to purchase insurance that does not meet state requirements, be sure to check what your specific state requires before you buy an auto insurance policy.
An insurance customer will pay their company a premium, which will give the customer access to all of the coverage benefits of their individual insurance plan. The cost of the premium is decided by the company and is influenced by factors such as driving record, age, gender, credit rating, type of car, location of where the car is being driven, amount of insurance claims made and the amount of accidents a driver has previously been in. Premiums are typically paid every month, but some insurance companies let drivers make quarterly, semi-annually or yearly premium payments as well. When you compare auto insurance rates, be sure to compare how frequent the payments are. Spreading out a payment over the course of the year can make auto insurance very affordable.
There are many different types of coverage a driver can obtain for not only their car, but their person. The two most basic and broad types of coverage are collision and comprehensive. Collision coverage, like its name suggests, usually only pays for damage to your car that occurs when your car hits another vehicle or object. Comprehensive coverage, on the other hand, pays for losses in addition to collision. If your car is stolen or damaged by acts of God, comprehensive coverage will compensate you.
Other types of coverage include bodily injury liability, personal injury protection, uninsured motorist and property damage liability. Bodily injury liability covers injury to people while driving your car. If you kill or injure someone while driving, this coverage will provide you with protection. Personal injury protection pays for medical expenses if you are injured while driving, as well as medical expenses for passengers. Occasionally, personal injury protection will also pay out if you are injured as a pedestrian. Uninsured motorist coverage works exactly as it sounds: it protects you if you are involved in a collision with an uninsured or hit-and-run driver. Property damage liability offers protection if your vehicle causes damage to someone else’s property.
Most auto insurance policies today are known as standard policies. Standard auto insurance assesses damages based on who is determined to be at fault. No fault insurance, which is rare, provides equal coverage to motorists independent of who is at fault.
Please note that auto insurance companies do not pay out all expenses incurred in accidents, nor do they assume all of the risk when offering policies. Insured motorists are still responsible for paying a smaller amount of the damages. People who buy auto insurance, in addition to paying the company a premium fee, pay a deductible too. The deductible is the amount of money an insured person must pay out of pocket before the insurance company begins paying for damages. While many people might be familiar with health insurance deductibles, auto insurance deductibles are a bit different. With health insurance deductibles, the deductible is a limit that must be met by the end of the year. With auto insurance deductibles, the deductible needs to be paid every time there is an event where a claim is made.
The amount a deductible can cost varies, but it usually ranges from $250 to $1000. A deductible of $500 is considered average. The price of the deductible can influence the cost of a total insurance policy to a large degree. If you pay a higher deductible, the cost of your premium will be much lower. Conversely, if you pay a small deductible, your premium costs will be much higher. A person could risk having a higher deductible in order to have a lower premium, but then that person would potentially be responsible for paying much more out of pocket than people with lower deductibles. When you compare auto insurance rates, be sure to compare the amount of deductible you can pay with each company as well. Doing so might save you a lot of money in the future.
Some insurance companies offer lower premiums if you meet certain factors. If you have repeatedly proven that you are a safe driver, your insurance premium might be lowered. When shopping for auto insurance, compare auto insurance companies to see if they have discounts for doing things in addition to driving safely.
▷ Are There Penalties For Changing Car Insurance Companies?
Since the whole idea behind your decision to compare auto insurance quotes is so you can save money on your car insurance, the last thing you want to have to pay is a penalty to leave your old car insurance company.
If you have done your auto insurance comparison and decided that your current car insurance rates are not as cheap as you can get, you will also need to read the fine print on your policy.
Some car insurance companies charge you for cancelling, but this information is disclosed on your current policy and this is only applicable once you have paid your premium for the current policy period.
This is called a short-rate cancellation fee and every insurance company calculates it differently.
If you find while comparing auto insurance quotes another company that will offer you a cheaper car insurance premium and your current car insurance company charges a penalty for early termination, wait until your premium is due before changing companies. This way you will avoid paying a cancellation fee.
When there is a cancellation fee from your current car insurance company, they will take it out of the refund of your unused premium. You pay for your insurance in advance, which gives the insurance company control over your funds.
Your current car insurance company may not be one of the companies that charges a cancellation fee, but may make you wait for your refund check. Your check will come from the home office of the insurance company and the cancellation of your policy will need to go through the proper procedures. These things all take time, so you will be out that money for some time.
Once you have decided to leave your current insurance company, any premium that you have paid in advance will be pro-rated to the day that the cancellation was put into effect. The insurance company will use that figure to decide how much of your premium to keep and how much you are entitled to be refunded.
It is not as cut and dried as if you pay for six months and cancel at three months, you are entitled to a refund of three months. The insurance company that you are currently with will apply their version of the short-rate cancellation fee and based upon the formula that they use to determine your daily usage of your insurance, they will deduct that amount from what you have paid.
As all insurance companies are regulated by the state, fees that they charge to cancel policies or how they calculate the short-rate fees have all been approved by the legislation.
For instance, the state of Maine allows a car insurance company to keep 10 percent of the unearned premium as a way to offset costs that the company incurred on your behalf by issuing your policy.
Just as each insurance company charges different fees, you need to know what your state has said about how much of your premium that the insurance company can keep if you should decide to cancel before your premium is due. The fee may make it worth your while to stay with your current car insurance company until your premium is due.
Even though you find out that your car insurance company charges a fee to change in the middle of your premium, this should not stop you from doing an auto insurance comparison for a cheaper insurance premium.
It is easy to compare auto insurance quotes and if you find a cheaper car insurance premium, you should weigh all the fees and expenses that it will cost you to change companies in the middle of the policy period. If the expense is more than the savings, then simply wait until your policy period is up and do another auto insurance comparison.
Do not forget to include your current car insurance company when you are comparing rates.
▷ Is Full-coverage Car Insurance Necessary?
When you compare auto insurance quotes, one of the things that you will be comparing is the cost of different types of coverages. Auto insurance quotes contains the price for individual coverage, the limits of those coverages and the cost of carrying a low deductible versus a high deductible.
Your auto insurance comparison should be for the same coverages, deductibles and limits for each company you are comparing. You want to compare auto insurance quotes equally in order to make a good decision regarding the price of your premium.
Your state will set the insurance requirements for what coverage you need and what limits you can purchase. Each state is different; you will need to contact your state Insurance Commissioner’s office or local Department of Motor Vehicles to find your state’s requirements.
➕ What is full coverage insurance?
Full coverage insurance includes the state mandated liability insurance, along with comprehensive and collision insurance. While the state may not require you to carry comprehensive and collision insurance, if you have a loan or a lease against the vehicle you are driving, your lender will require you to carry it.
➕ What is the benefit of having full coverage insurance?
Comprehensive and collision insurance will cover damages to your vehicle if you should be in an accident or if you are hit by a hit and run driver. It also will cover your vehicle in the event of theft or even hail.
Comprehensive and collision take care of you and your car.
Full coverage can also include bodily injury, personal injury protection or other liability insurances. Some states have different terms for the coverages, but they all relate to your insurance taking care of damages or injuries that you cause to other property or people.
➕ What are the disadvantages to full coverage insurance?
Sometimes this insurance is more expensive than what you are trying to insure. If your vehicle is only worth a couple thousand dollars, then you may not benefit from what you would need to pay in premiums on a comprehensive or collision policy.
If your vehicle is older, then it may not be worth the money that you would put out in premiums. You can always take that money and put it in the bank where you will have it if you need to replace your vehicle.
Full coverage is a misnomer, and is usually used to indicate that a person has added comprehensive and collision insurance to their policy. No one policy can possibly provide coverage for everything possible, so when someone talks about full coverage, they may be stating that they added those two insurance coverages.
The benefit of adding collision and comprehensive, other than this satisfies the bank’s requirements, is that you are now better protected against damages from both natural and human error.
Since there is a good chance your state will not require you to carry comprehensive and collision insurance, you need to work with your agent or insurance company to determine how much coverage you really need. You want to make sure that you cover your entire vehicle and in the case of a loan or lease, you need to make sure you cover the balance of the loan.
You need to know what your vehicle is worth and how much money you could possibly come up with in the event of an accident. If you put away $1,000 and not pay it to the insurance company, you can easily get a lower premium with a higher deductible and still have the money set aside. If you never need to use it, you are ahead both the $1,000 and the savings in your premiums.
Compare auto insurance quotes to see what the difference would be with a high deductible and a low deductible. Auto insurance comparison is quick and easy. Enter your zip code and quotes will be headed your way.
▷ How Often Should I Compare My Car Insurance Rates?
There is no bad time to compare auto insurance quotes.
However, there are some very good times to do a little auto insurance comparison shopping.
Did you know that if you change jobs, you should compare auto insurance quotes? Likewise, if you get married, you should not just add your spouse to your car insurance policy, but take that time to compare auto insurance quotes by using your current car insurance policy as a reference.
Most people wait until their car insurance premium is due to start looking around to do their auto insurance comparison, but you can always look to get a cheaper car insurance premium any time that you are ready.
Additionally, people will wait until something significant happens in their life before they shop car insurance rates.
Marriages, teen drivers, birthdays and job changes can all trigger the shopper to go and compare auto insurance quotes. These may be wonderful times that remind you to shop for a cheap car insurance premium, but they do not need to happen in order to do some rate comparing.
In fact, you can shop for a car insurance quote anytime you like. There are no penalties for shopping around and you are not committed to buy just because you are looking.
Car insurance companies make it very easy to shop their rates and now that you can do this online, you can shop 24/7 and you do not need to get out of your pajamas.
The worse thing that can happen to you when you compare auto insurance quotes is that you get a cheaper quote than what you are currently paying for your car insurance.
You can compare with local agents from the phone book simply by calling them or dropping by their office while you are out running errands or on your lunch hour.
Do not forget that when you get ready to compare rates, there are certain items and information that you need to have with you before shopping insurance quotes. To see a list of things that you will need, please see this article on what information you need in order to get a new quote.
Another thing to remember is to call you own insurance agent or company and get another quote from them. It may be that rates have changed for your area or that you have had some lifestyle changes that will affect that rate as well. Just like going to a new company, your own insurance company may not be aware of things that have happened in your life until you start doing some comparing.
Since so many factors can make a difference in your insurance rates, auto insurance comparison should be something that you do regularly, and not just when your premium is due.
By continually comparing your car insurance rates, you can best stay on top of changes to your rates. If your car insurance company has raised rates, you will know it simply by looking at your premium.
Maybe some of the coverages that you have are costing the company more and they are assessing increases to all of their policyholders. If you are continually aware of your costs and rates, then you can decide what will best serve you and your family.
Changing car insurance can be done at any time, so there is no need to wait until your premium is due. Should you find a cheaper car insurance rate, there is no reason to wait to change, just let your current insurance company know and cancel that policy after you have gotten your new policy.
If you do find a cheaper car insurance premium, make sure that the policy you are replacing and the policy that you are buying are the same coverages and that you are not losing coverage that you need.
▷ How Many Times Can I Change My Car Insurance Company?
Everyone knows the cost of car ownership has gone up in the last few years. As if the high price of a gallon of gas was not enough, there are the added expenses for tires and maintenance and car insurance. According to AAA, it now costs 3.4 percent more to own a vehicle than it did in 2010.
While you cannot control the cost of gas or tires, you do have some control over how much you pay for your car insurance. Many people simply do not want to be bothered to compare auto insurance quotes, but if they knew how much they could be saving, they might consider doing a little comparing of insurance quotes.
Since most policy periods are for six months or a year, you could conceivably change car insurance companies every time your premium is due. You could also change any time that you wished, although there may be some penalties or short-rate cancellation fees for any time you changed after you paid your premium. For more information on short-rate cancellation fees, please see this article. [insert Are there Penalties for Changing Insurance here]
You can change car insurance companies as much as you like. You just need to be aware that there may be a cost to doing a lot of switching around. Between possible fees and the time spent to compare auto insurance quotes, you may end up costing yourself more than you will save by changing companies.
This does not mean that reasonable auto insurance comparison is a waste of time. It is quite the opposite. When you take the time to compare auto insurance quotes, you are taking control of your financial future.
Not only should you compare auto insurance quotes regularly, you should also include your own current insurance company and you should compare many different companies in your auto insurance comparison. You should get as many different insurance quotes as you can get, keeping in mind, that they all need to be for the same coverage, deductible and vehicle.
Just because you can change your car insurance company as often as you like, does not mean that it is a smart way to save money. It will depend upon your current car insurance company, but there may be a discount for your loyalty.
Even though the car insurance company cannot do discounts randomly since the government regulates them, they may be able to give you a discount for the length of time that you have been insured by them. Customer loyalty does have rewards attached to it, and a small discount may make the difference between a cheap car insurance premium and a cheaper car insurance premium.
By comparing rates from several different companies and talking to your current car insurance agent, you may be able to get your car insurance premium the cheapest possible.
Keep in mind that when you do your auto insurance comparison that you have your current policy in front of you so that you can get the same coverage, the same limits and the same deductibles included in your new insurance quotes. Sometimes quotes are not quite the same coverage and that can make all the difference in the premium amount.
It is easy to get a new quote; you can get it online or by calling your insurance agent and telling them that you are shopping around for rates.
Online quotes are quick and available to you 24/7 and they will give you a starting point towards saving money on your car insurance.
If you have not done anything to compare auto insurance quotes lately, it does not cost you anything to get a new quote and you may find that you can save a lot of money on your car insurance.
▷ Is There a Penalty for Cancelling My Car Insurance?
There are varieties of reasons to cancel your car insurance policy and some of them do not include buying another policy.
If you have had your car repossessed or maybe you have a medical condition that required you to stop driving and sell your car, you would need to cancel your car insurance because there is no longer a car to insure.
Most often, cancelling of car insurance policies are due to comparing auto insurance quotes and finding something that fits your budget better.
You can shop for auto insurance quotes anytime you like, but to make it simple, it might be a better idea to do your comparison shopping at renewal time.
If you do decide to cancel your car insurance during your policy period, you may find that you are subject to cancellation fees and other penalties.
Not all states are the same with their insurance regulations and not all insurance companies charge cancellation fees to their customers.
The state of Connecticut has reported that the insurance companies in their state can charge a cancellation fee if the company so chooses. The insurance company has the option of charging no fee, to refund pro-rata, to calculate refunds based on a short-rate or to charge a flat cancellation fee.
The state also does not require the insurance company to disclose this information on their policy; the state only requires the company to indicate that cancellations are processed through normal company procedures.
You may need to talk to your state’s insurance department to find out what the current laws are for your state in regards to cancellation policies for the insurance industry. Some states require the insurance companies to spell out each fee, while others, like Connecticut only require the disclosure of a fee.
If your company has no cancellation fee, uses the pro-rata calculation and you have paid a 6-month premium, you will get back the exact difference in what you have used and what you have paid. A 6-month policy costing $600 with 2 months left on it will return $200 to you as your refund.
If your company uses a short-rate refund, which is also considered a 90-percent pro-rata in some states, you would receive 90-percent of the amount calculated by using the pro-rata calculation.
In the same scenario, instead of getting $200 back, you would only get 90-percent of the $200 back. The company would take $20 towards their cancellation fee, leaving you with a refund of $180.
Short-rate refund can mean a much stiffer penalty than the 90-percent, so you need to find out what your current insurance company uses to calculate a short-rate.
A flat fee cancellation is just that. If your company charges you a flat fee of $50, you will find that deducted from any refund that you might be entitled.
The fees collected for cancellation during a policy term are charged to offset the costs of doing the paperwork or cancellation process when you cancel during the policy term as opposed to the end of a policy term.
If you decide to cancel your policy early in order to make a switch to another insurance company, you might do well to contact your current car insurance company and find out what cancellation fees are applicable to your policy. It may be in your best interest to keep your current insurance and compare auto insurance quotes closer to the time of your policy renewal date.
For cancellation of insurance based on a totaled out vehicle, there generally is no cancellation fee associated with this type of cancellation.
Check with your current car insurance company for a complete disclosure of how they calculate their cancellations to avoid being penalized for cancelling your policy.
▷ Why Do Auto Insurance Rates Increase?
Car insurance rates are determined by many different factors and these are important for you to know when you are ready to compare auto insurance quotes. Comparing quotes without all the information may keep you from getting an accurate auto insurance comparison and possibly paying too much for your car insurance.
Insurance rates are driven by factors that are both in your control and out of your control. The things that are out of your control can cause the insurance rates to increase, which will increase your insurance premium making it not as cheap as it once was.
Every state regulates the insurance companies operating within the state boundaries and the Insurance Commissioner is directly responsible for overseeing the insurance industry.
Insurance companies are given a set rate by the state to charge as a basic starting point. When the insurance companies feel that the cost of doing business in those states are rising to a point where they are no longer able to afford to write insurance policies, they have the option to request a rate increase.
The rate increases must be approved by the states’ legislature before the insurance companies can start charging a new rate.
In states such as Florida where hurricanes and floods have done tremendous damages to vehicles, the cost of comprehensive insurance is much higher than a state that does not have the exposure to claims caused by natural disasters.
Those costs can come all at once and can render an insurance company financially crippled by the sheer amount of claims filed in a short period.
In 2004, the state of Florida had four significant hurricanes within a two-month period, which resulted in the devastation of several smaller mobile home insurance companies.
While the auto insurance companies cannot immediately raise their rates, they can petition for assistance by asking for a rate increase to offset their losses. This increase may take months to years to go into effect, but unless the percentage of increase is exorbitant, the insurance companies will generally succeed in getting rates increased.
These changes in rates can cause your car insurance premium to increase the next time that your insurance premium is due.
This is one of the things that you need to know when you are comparing car insurance.
If your state has raised the rates, when you compare auto insurance quotes, you may think that the other insurance companies are higher than your own. Until you receive your next premium, you may not be aware of any statewide increase.
When you do your auto insurance comparison, you might look at your state’s website to see if there has been any change in insurance rates for the auto insurance industry. Your state should have a separate section for the Insurance Commissioner, which lets you know of changes to the financial and insurance laws in your state.
The more information you are equipped with, the better chance that you will get an accurate quote on your car insurance.
Things that are directly within your control over what insurance rates you pay, include your driving history, your credit history and the type of make and model car you drive.
If you have poor credit, you can work to improve your credit score. If you have a history of tickets or moving violations and accidents, you can take a defensive driving course. If you are driving an unreliable vehicle, or one that is targeted by thieves regularly, you can change vehicles.
While you cannot change the state rates for insurance that you pay, you can do many little things to make sure that you are getting the best deal on your car insurance and paying the lowest rates possible.
▷ Look for auto insurance online
If you live in Kentucky you might want to compare auto insurance quotes to make sure you are getting the best rates available. Kentucky car insurance prices will vary and often it is possible to get the same coverage at a lower price if you check online. It is easy to do and might save you some money and provide better coverage then you have.
If you are thinking about changing carriers in the state of Kentucky, you will want to make sure you have a new policy in place before you terminate the old one. Kentucky car insurance companies will offer you a better rate if they know you are responsible and letting a policy lapse will alert them to the fact that you had no insurance for a period of time. You will also be able to get a better premium for a lower price if you have a good credit score because the Kentucky car insurance agents also see this as reflection on your character and ability to drive.
In Kentucky when you are looking for great rates and are going to compare auto insurance quotes online, you will want to make sure you are going to be getting the kind of coverage you need to protect your family while driving. Don’t forget to add on roadside assistance to your policy because the cost is very low and it will give you the peace of mind to know that if you have a dead battery or run out of gas, that help is on it’s way.
When you are going to compare auto insurance quotes it is important to know what discounts the company offers. If you have a young driver in the family, a discount may be given for good grades. The Kentucky car insurance companies are competitive and they want your business, so it is important to look and compare auto insurance rates at least every year because there is no reason to over pay for the coverage you are getting.
It is possible to pay monthly or every three months for the Kentucky can insurance you are going to be purchasing. Often they will want an initial payment when you apply for the binder. The underwriter will make the final decision about the price you will be charged and so it is important to tell the truth about all driving infractions you have had. Ultimately they will show up and the insurance company will raise your rates and even cancel you if you have to many of them. Honesty is always the best way to deal with an insurance company because they are there to help you get the best coverage possible and they can only do that if they have all the facts.
Living in a big city will often cause your rates to increase. Location does matter in the insurance world. Lexington, Louisville, Bowling green, Owensboro and Covington are the largest cities in the state and if you live in any of these places, you can expect your premium to be a little higher. The insurance company feels you will be driving in traffic and the possibility of getting in an accident is a higher. Give your insurance company a call today and see if you can save some money.
- ▷ How auto insurance works
- ▷ Are There Penalties For Changing Car Insurance Companies?
- ▷ Is Full-coverage Car Insurance Necessary?
- ▷ How Often Should I Compare My Car Insurance Rates?
- ▷ How Many Times Can I Change My Car Insurance Company?
- ▷ Is There a Penalty for Cancelling My Car Insurance?
- ▷ Why Do Auto Insurance Rates Increase?
- ▷ Look for auto insurance online