Five (5) questions to ask your insurance agent.

by Steve Wilson on June 17, 2010 · 0 comments

in Auto

When it comes to auto insurance you will want to be sure you do all you can to get the absolute best price and the way to do this is to plan as much as possible when it comes to finding ways to reduce the costs of auto insurance as much as you can. One of the best ways to do this is to be sure you take the time to talk to your auto insurance agent, they are certain to be able to allow you some great ways to reduce the costs.  Asking the right questions when you get auto insurance quotes can save you money and frustration. For one reason or another, your agent may not always discuss your policy in excruciating detail. They assume you’ll read it. But if you’re like most people, you’ll park it in your filing cabinet and forget about it.

In order for you to get the absolute best price on car insurance you will want to do all you can to find the best prices and one of the best ways for you to do so is by taking the time to ask the insurance agent you use at least these five questions:

    1. What are some of the best ways to reduce the costs of auto insurance and are there any discounts that I may qualify for? This is certainly the best way to allow you to get some great ways to reduce the costs of your auto insurance as much as possible and help you find some great ways to do so.  The types of discounts you should be looking for include: safe_driver2
      • Longevity discount – if you have been with the insurance company a long  time.
      • Safe driver discount – if you go a long enough period of time without an accident or ticket.
      • Multi-insurance discount – if you insure multiple things such as your car and your house with the same company.
      • Education discount – if you have a science-related or teaching degree.
      • Student or Senior discount – for special age groups.
    2. What is the best policy for my situation and the type of car that I drive? If  you are like most people then you realize the costs of insurance can vary greatly depending on what type of Insurance Policypolicy that you may get and in order to get the one most suited for you as well as the one that will be offered at  the lowest costs, you will have to pay. There are many ways to help you reduce the costs of insurance and this can certainly start with the type of policy that you have.
    3. Do I have comprehensive and collision coverage — and is it worth it?
      Collision coverage pays for repairs to your car in the event of an accident, no matter who caused it. Comprehensive coverage pays for damage suffered through other events — like vandalism, flood, theft or tree damage. Both coverages generally require that you pay a deductible first.

Alex Soto, former chairman of the Independent Insurance Agents & Brokers of America and current president and CEO of Miami-based InSource Inc., says that collision and comprehensive coverage can be a good idea if you own a newer car. But once your car depreciates in value, you may want to cancel it. For example, it may not be worthwhile to pay $400 a year for collision/comprehensive insurance to protect a car that is only valued at $3,000. If you make a total loss claim, you’ll pay your deductible (say, $1,000) and the insurance company then pays the remainder — in this case, $2,000. Was that $400 premium worth it?

On the other hand, if your car is valued at $40,000, buying comprehensive and collision coverage for $500 to $600 may be a good idea. “It is worth it because while you can afford a $2,000 loss as in the previous example, you may not wish to self-insure $40,000,” Soto says. Check the NADA Guides‘ value of your car each year and decide if collision and comprehensive coverage is a good bet.

    1. Does my policy include uninsured/underinsured motorist (UM/UIM) coverage? page3pic1
      Not all states require you to have UM coverage.  Uninsured or underinsured motorist coverage (UM coverage) pays for your injuries if you are struck by a hit-and-run driver or by someone who does not have adequate insurance — either because they have no coverage or because they do not have enough coverage — to pay for your injuries. Normally, this type of coverage is limited to bodily injury, and it will not pay for damage to your vehicle or for other types of property damage. To get that kind of coverage, you will have to add collision coverage to your policy.

      • you or a relative who lives with you, while a driver or passenger in the vehicle named in your UM insurance policy or any other vehicle, or while a pedestrian
      • anyone else driving your insured vehicle with your permission, and
      • anyone else riding in the vehicle named in your insurance policy, or in any other vehicle you are driving but which you do not own.
      • If your Oklahoma auto accident involves a hit-and-run driver, you must notify the police within 24 hours of the accident.
      • If your accident involves a hit-and-run driver, the driver’s car must have actually hit you — being forced off the road by a driver who disappears is not sufficient.
      • Your UM coverage will be reduced by any amounts you receive under other insurance coverage, such as your personal medical insurance or any applicable workers’ compensation coverage.
      • If you or a relative are injured by an uninsured motorist while you are in someone else’s car, your UM coverage will be secondary to the UM coverage of that other car’s owner.
Who is usually included in my uninsured/underinsured motorist coverage?

Most UM coverage will pay up to your policy’s UM limits for injuries caused to:

What are the limits on my ability to collect under an uninsured/underinsured motorist provision?

UM coverage usually limits your ability to collect — and the amount you receive — as follows:

You should also ask your agent what type of coverage you have in the event an uninsured driver hits your vehicle and injures you. While collision coverage pays for damages to your vehicle, it does not cover medical bills. You may want to inquire about UM coverage for bodily injury.

    1. If my car is totaled, how much will my insurance pay to cover the loss?
      If you don’t address the issue when you buy your policy, the claims check to pay car-totaledfor your totaled car may shock you.  Some insurance companies pay out “actual cash value” while others pay an “agreed upon value” in the event of a total loss. Actual cash value is the depreciated value of your car at the time of the loss. Many insurance companies use the NADA Guide to look up this figure.

For example, say you insure your new car valued at $20,000 in January. With an actual cash value policy, your car may only be valued at $16,000 in July. That’s what you would be paid for your wrecked car. But if your policy has an “agreed upon value,” the total loss value of your car (agreed upon annually when you renew your insurance) does not drop during the term of your policy.

This way you have the piece of mind of knowing exactly what that value is listed at and sometimes you have the flexibility to increase that agreed value for an additional premium. Only certain companies such as Chubb Group, Fireman’s Fund and Chartis Private Client Group offer “agreed upon value.” Check with your agent to see if your insurer offers that option. Adding the feature to your policy will cost around $100 extra for the average policyholder, she says.

There is nothing like being able to reduce the costs of your auto insurance and this can take some time and effort, but will much likely be worth any time you put into finding the lowest amount of insurance because this is something you will have to carry for a very long time, making it a great way to save money in the  short and long run.

The amount of savings you get initially will certainly add up when you are able to shop around and get lower insurance costs. This is certainly the entire reason that most people do their research and take the time to talk to their insurance agent.

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