The Secrets to Get Cheap Auto Insurance Coverage

cheap auto insurance coverage

In every business there are secrets to profitability that insiders learn and trade and use to create strategies, that are not commonly known to the public. Insurance is no different.

The Secrets of Auto Insurance Quotes

Keep in mind that insurers are not generally charity organizations. Many were started as Mutuals or Reciprocals, where the losses are shared, and the premiums are not designed to have a profit component, however, those days are largely gone.

The more common form of the Insurance Company is designed to make a profit so that it can attract investors in order to offer larger and better crafted policies. All under the watchful eye of State Regulators who are supposed to keep the public interest in mind, which forms a sort of check and balance.

The Secrets of Cheap Auto Insurance Coverage

There are however strategies that can help you get cheap auto insurance coverage. Here are a few for your consideration:

1. Shopping Around for Cheap Auto Insurance

Do not make the mistake of keeping your insurance with the same company forever. Insurance is a very competitive business and each company is constantly changing its focus to better underwrite to their particular niche of the market. You will find that the insurance company that you wanted when you were newly married is not the company you want when your kids are growing up.

2. New Policies

A new policy can sometimes be a lost leader for an insurance company. They may have spare capacity one year and be very interested in getting more policyholders even at a premium that is not attractive. Some companies discount the first year premium assuming that you will be with them in years two through six, so they will make their profit in those years.

3. Renewals to Get Cheap Auto Insurance

The second and subsequent years where you stay with the same insurance carrier can cost you some extra money. Most policies would have an automatic or scheduled premium increase in year two and so on, to take into account that there is claim inflation, i.e. a dented fender might cost more in year two than it did when you first got the policy.

4. Technology

In today’s world, technology changes the complexion of insurance each day. On some days the staffing of insurance companies gets cheaper as they employ more computers. On other days the cost of fender repair gets cheaper because they are plastic rather than metal. These savings are likely not passed on to you unless you shop for a new policy.

5. Coverage Differences

Not all companies offer the same coverage. While the name of the coverage might be the same, like “auto physical damage” coverage, the claim staff may approach claims completely differently. One company may let you go to your favorite repair garage and others may cause you to drive all over the state looking for cheaper parts for your car.

6. Gimmicks

Many companies have gimmicks they market to entice you to buy insurance from them. It can be such things as: claim free discounts, multiple product discounts, no cancellation after first accident, $xxx dollars of savings, just to name a few. Keep in mind that, as noted above, they are not in this for charity. They know the cost of each of these gimmicks and that cost is blended into the premium.

Keep in Mind

The best approach is to shop online. Select companies or Brokers that have been in business for many years.

Enter the minimal data requested on the site to get a sense of the premium per company in your area. Then do some research on the companies and their ratings and ask friends, which companies they like or where they have had a good claim handling experience. The lowest price is not always the best purchase.

There is a World of Coverage, out there! Remember to use to help you get that cheap auto insurance coverage and save you time.

About David Thompson

David Thompson is President and CEO of eINSURE Services, Inc. Dave is on the Board of Directors of AmerInst Insurance Group, Bermuda and is Chairman of the Underwriting Committee, as well as co-inventors of RINITS, a new insurance securitization product. He has a history of creating successful new ventures in the insurance business.