Be Aware Of The Dangers Of Cheap Auto Insurance

By Jon Arnold

Everybody likes to save money. "Discount" is becoming a new way of life. Many companies are representing themselves as the exact same thing as larger, more expensive companies, but with lower rates and more reasonable terms. Of course, this cheaper discount price does come with a cost. With auto insurance, the cost is usually unnoticeable until you have a claim.

Discount auto insurance, just like all other insurance companies, have specialized individuals to weed out fraudulent claims. However, the reduced resources that cheap auto insurance companies are saddled with means that legitimate claims may sit for months without their due attention. This means months without the resources to fix a damaged car and months without transportation. In many states, accident damage must be fixed to an acceptable degree before a state inspection can be passed. This means that in the event that the insurance company hasn't even reviewed a claim after several months, accident damage must either be fixed before state inspection is due or the car will have to sit idle while waiting.

Unfortunately, no states have any kind of mandate on how quickly an insurance company needs to act on a claim, so if you have to wait months for a claim to be done, the auto insurance company is well within their legal right, and you have discovered one of the things that makes that insurance cheap.

Discount auto insurance will do little more than keep a car on the road with the very basic of legal requirements. While everyone wants to save money, the cheapest isn't always the best value and can often end up costing consumers more in the end than middle priced auto insurance. Getting the most insurance for as little money possible is a natural goal of everyone.

Cheap auto insurance is usually only cheap when sticking to the bare minimum legal coverage. Once consumers start opting for more extensive coverage, often their premium skyrockets and they end up paying more than they would have if they had started with a reputable car insurance company.

A reputable car insurance company devotes itself to customer service and quality while cheap auto insurance companies devote themselves to being the cheapest thing in town, thus their customer service, claims departments, and quality are all based on bare bones staff with bare bones service. They simply can't provide the resources necessary to offer their customers anything more than a legal car, provided nothing happens to it.

Many cheap auto insurance companies rely more on automation, and getting a live human being on the phone to deal with issues, from claims to billing errors, is about as easy as setting off into the frozen tundra in search of fresh vegetables. They are more prone to error simply because they have as little human input going into their systems as possible.

One of the greatest hidden dangers of dealing with a cheap auto insurance company is security. The information that a driver gives to an auto insurance company is sensitive material. Most require a credit card number and a social security number, address, phone number, and even if the customer takes regular prescription medication. This information is more than enough for identity theft. Cheap auto insurance companies place very little value on the expense of security. While reputable insurance companies are not bullet proof, they do hire security experts to make sure that the sensitive information in their files stays in their files and not in the hands of ill intentioned hackers.

For quality, safety, and reasonable or better customer service, cheap auto insurance companies simply can't reach the same heights as reputable auto insurance companies. Hands down, the only thing people save when choosing cheap auto insurance is about $50 at the beginning of their policy. After that, there simply isn't a bargain to be had.

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Auto Insurance - 8 Ways To Lower Your Auto Insurance Costs

By David R. Wilson

Auto insurance is a necessary expense for most of us. Even with seemingly increases every year, very few of us stop and see if there are ways that we can reduce the cost of our auto insurance. One of the best ways to keep your auto insurance costs down is to have a good driving record. Listed below are eight additional ways that you can start to save money on your auto insurance.

1. Shop Around

Don't settle for the price that your insurance company wants to charge you. Auto insurance prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information or if you don't want to deal with insurance agents, use the Internet to get multiple quotes.

Don't shop price alone. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they provide information on consumer complaints by company.

2. Compare Insurance Costs When Buying A Car

Before you buy a new or used car, check into insurance costs. Car insurance premiums are based in part on the car's sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. Look for cars that have safety features like daytime running lights and anti-theft devices.

3. Get A Higher Deductible

Deductibles are what you pay out of pocket before your insurance policy kicks in. By getting a higher deductible on your car insurance policy you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15% to 30%. Going to a $1,000 deductible can save you 40% or more.

4. Reduce Coverage on Older Cars

This is one of the most overlooked tactics to lowering your insurance. As your car ages it becomes less costly to replace, so why pay a premium for a replacement value that is more than your car is worth? A role of thumb is that is that your car should be worth more than 10 times the premium you are paying.

5. Buy your Homeowners and Auto Coverage from the Same Insurer

Many insurance companies will give you a break if you buy two or more types of insurance from them or if you insure more than one vehicle with them. Ask for your insurance representative what multi-car discounts that they offer.

6. Maintain a Good Credit Record

More and more insurance companies are not using credit information to help price auto insurance policies. So paying your bills on time, bit obtaining more credit than you need and keeping your credit balances as low as possible are all tactics that can help you get a lower auto insurance quote.

7. Ask about Group Insurance

Some insurance companies offer reductions to drivers who get insurance through a group plan from their employers, professional and business groups, or other associations (like AAA). Look at the clubs and associations that you belong too and see if any of them offer discounted auto insurance.

8. Seek Out Other Discounts

Ask your insurance company for a list of all the different types of discounts that they offer. You would be amazed at the discounts that are available on auto insurance today. They range from discounts to being in the military, to students and people who have had no accidents or tickets in a number of years.

David Wilson covers how to save money on your insurance needs at [http://www.cheapinsurancenetwork.com]Cheap Insurance Network His latest article on [http://www.cheapinsurancenetwork.com]Cheap Auto Insurance provides tips on how to save money when buying car insurance.

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