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Dealing with the ins and outs of auto insurance can be very tricky and confusing. The following recommendations could help you figure out some of the more complicated points of auto insurance:
• You must determine the appropriate coverage. Half of your auto insurance bill will cover liability and that has to do with how you are going to use the vehicle, such as for commuting to work and your driving record. If you have a clean driving record, you would think you would pay less for insurance than you would if you had a speeding ticket on your record. You can control the other half of your premium which covers damage or loss to your vehicle, comprehensive and collision coverage.
• Shop around for insurance. In most states, there are hundreds of insurers competing for business, so it’s possible to save hundreds of dollars by obtaining quotes from different auto insurance providers. Do some work with your insurance provider to get more than one quote. It pays you to shop around, especially if you feel you’ve been paying too much.
• Look for insurance discounts. Many insurers will give you a discount if you buy two or more types of insurance from them, for example auto and home insurance. Ask about discounts for air bags, anti-lock brakes, daytime running lights and anti-theft devices.
• Consider taking a higher deductible. You could lower your insurance bill by increasing your deductible. But make sure you can pay the higher deductible if you file a claim.
• Look into “stacking” coverage if you file an insurance claim. Stacking uninsured/underinsured motorist coverage means that you can collect from more than one of your auto insurance policies. Most states prohibit this, but there are about 19 states that either allow stacking or don't address the issue either through legislation or litigation. Check your insurance contract to see if it's allowed. You will more than likely pay a higher insurance premium if you have stacked coverage. It could be 10% to 30% more depending on the litigious nature of the state in which you reside.
• Check with your insurance provider BEFORE buying a car. Your premium is based in part on the car’s sticker price, the cost to repair it, its safety record and the likelihood of theft. Avoid shopping by price alone. You want an agent and a company that answer your questions and handle claims fairly and efficiently.
• Notify the insurance company as soon as you change companies. You need to cancel your old policy on the same day, but don’t cancel your old policy until you’ve lined up a new contract. It’s important because some states like New York will fine you for the number of days you go without insurance. Most auto insurers specify that you can terminate your policy any time you want by informing your company in writing about the date you wish that coverage be terminated or you can do that over the phone.
• Pick the insurance payment option that best fits your budget. Most companies will give you the ability to pay over time, but that comes at a price. Your payment could increase a few dollars each time you pay by installment. Insurers can accept payments monthly, quarterly, or every six months, what ever is most convenient for you. The more you break down your payments, the more the cost adds up.