Read Your Auto Insurance Contract and Look For These Clauses BEFORE You Sign

Alright, let's say you've followed our advice and shopped around for auto insurance quotes. You've got the lowest auto insurance quote in front of you and you're ready to sign. BUT WAIT. There are two clauses that you must look for in your auto insurance contract.

1. Your right to sue - Some companies will throw a clause into the agreement where you will be forced into arbitration in the case of a disagreement, instead of being able to take the case to court. If at all possible you don't want to give up this right. Doing so will make it easier for the insurance company to take advantage of you. Since contracts are mutual agreements, it may be possible to cross out this part of the contract. If the insurance company will not agree to this, it may be best to start looking elsewhere.
2. Aftermarket parts requirements - if you see statements such as "new factory", "like kind and quality", or "aftermarket parts" in the contract regarding the parts the repair shop will be able to use in the event of an accident, move on to the next auto insurance company. Aftermarket parts aren't well regulated at this point, and are considered by many to be substantially inferior to the factory parts. It is much easier to just research auto insurance companies that will provide factory parts, then to haggle with a company over the parts to be used after there is an accident.

After you shop around for auto insurance quotes, make sure that you follow through and read the contracts. Yes, I know it is boring, but the time you spend in the beginning will save you a lot of time and frustration later on. Happy shopping!

Avoid Lapses In Auto Insurance Coverage

Auto insurance companies are tricky folks. Rest assured, they will use every opportunity they can to charge you a bit more for your auto insurance. One way they do this is through lapses in coverage. If you allow your coverage to lapse, even briefly, you can be disqualified from receiving discounts, which can lower your premium significantly. From their perspective, a policyholder who allows their coverage to lapse isn't really being a responsible policyholder, and thus pose a slightly higher risk to the company. At least that is how they justify it. Plus, policyholders who let their coverage lapse are no longer paying premiums...auto insurance companies are in the business of collecting premiums so they don't like it when people stop.

So what is the moral of the story here? DON'T LET YOUR POLICY LAPSE. Make sure you pay your auto insurance bills on time. If you have searched around for auto insurance quotes from other carriers and decided that you can save money by taking your business elsewhere, be sure that you DO NOT quit your current policy until your new auto insurance coverage takes effect.

Auto Insurance and Your Credit Score

More often than not, your auto insurance carrier takes your credit score into account when determining your premium. As we have mentioned before, auto insurers are in the game of risk. The more they are at risk, the more you pay to be protected by them. People with low credit scores have proven that they are a risk, specifically a financial risk, and thus will pay more.

So how important can your credit score be in determining your rate? VERY IMPORTANT! In fact, you could end up paying 50% more for the same auto insurance if you have a poor credit score. So, the moral of the story is to monitor your credit score often, and keep it in good shape. Pay your bills on time, have some credit cards but don't open new accounts unnecessarily, keep a balance on your cards but never more than 50% of the total credit available, and again ALWAYS PAY ON TIME.

As mentioned time and time again, shopping around for auto insurance quotes will help you reduce your premiums. Despite your current credit situation, you should be able to save money immediately by getting auto insurance quotes from the major carriers. TAKE ACTION!

Save up to 50% on your Auto Insurance: Get Rid of Collision and/or Comprehensive Coverage on Older Cars

Comprehensive and collision coverage will cover the replacement of your vehicle in the case of theft, vandalism, or natural disaster, or in the case of a collision, respectively. This is terrific, but what if your car is only worth $5,000. Generally the cost of comprehensive and collision coverage is somewhere around 40%-50% of your entire policy. You could be in a situation where you are paying more in insurance than your car is worth.

So how do you figure out if you are paying too much. Add up your comprehensive and collision coverage premiums and multiply them by 10. If that number is more than the current Kelly Blue Book value of your car then don't buy the coverage. "But what if I get in an accident?" you say. Let's look at the statistics. In general the average policyholder only makes a claim once every 11 years. As for total losses, the average policyholder reports one every 50 years. Odds are on your side, so don't pay more than you need to.

It is a good idea to review your auto insurance policy often. Be sure to do your homework and get auto insurance quotes from the major companies. Getting auto insurance quotes, increasing your deductibles, not getting over insured, and taking advantage of discounts will help you lower your auto insurance premiums significantly.