All posts by Dorian

How to Get Cheap SUV Insurance

Do you drive an SUV? If you do, you might be surprised to see just how much it costs to insure them. What’s even more shocking is when you read the safety reports – they say that SUVs and other large vehicles are much safer to drive and have a lower injury claim than smaller cars. If they are safe, shouldn’t they be cheaper to insure, not ten to twenty per cent more than other vehicles?

The Issues that Raise Rates

The problem is that SUVs are often seen as very nice, luxurious vehicles. Thus, they are targets for theft. While they rank among the safest vehicles, they also rank among the most often stolen. Any other sporty vehicle or high-performance car will have high premiums because of this, too.

Another factor is their repair cost. It can cost a lot more to repair an SUV, especially its 4-wheel-drive system, than it costs to repair other vehicles.

Then there is the issue surrounding damages. SUVs, because of their size and heavier frames, often do more damage to other vehicles. This means your insurance has to pay out more money to have these other vehicles fixed if you are at fault in an accident.

SUVs are often top heavy because they sit higher off the ground than other vehicles. This means they are more likely to roll, especially if they do not have some of the newer stabilizing features. Rolling can cause more damage and personal injury, which again means the insurance company has to pay out more.

If you are set on driving an SUV, don’t give up and accept the first insurance quote you see. There is hope: it is possible to get cheap SUV insurance, especially if you put a little time and effort into it.

Cheap SUV Insurance

Lowering Your SUV Insurance Rates

Now that we’ve seen why SUVs have higher insurance rates, what can you do to lower them? You cannot really do anything about the repair cost or the fact that an SUV is going to usually do more damage to other cars, but you can help prevent accidents. You can counter each point against SUVs and lower your rates.

Issue: SUVs are often stolen
Solution: insurance companies do take into account where you live. If you make your home in an area with a high crime rate, your premium will reflect that. If you are moving to a new area, do some research into crime and pick an area with a low rate. Also, add an anti-theft device to your SUV.

Issue: SUVs cost more to repair/do more damage to other vehicles
Solution: not much can be done to counter this issue apart from trying not to get into an accident. Taking a defensive driving course can help you avoid accidents and can also get you a discount on your insurance.

Issue: SUVs can easily roll
Solution: make sure your SUV includes features such as electronic stability control. This helps prevent them from rolling in certain situations, and insurance companies will make note of these features.

Other Discounts

Many other insurance discounts will apply to your SUV insurance, but because the starting rate is so high, it may not seem like these discounts lower your rate that much. Of course, they do help. Any little discount is definitely worth it, so be sure you are getting every discount you are eligible for. Here are some of the ones that might apply to you:

  • Good driver discount
  • Multiple policy discount (having your home, life, or multiple cars insured by the same company)
  • Good grade discount (for students)
  • Woman driver discount (women are seen as better drivers and get a small discount)
  • Short commute discount (the longer your commute the more chance of an accident).

What You Need to Know about SUV Insurance

The sport utility vehicle (SUV) has been around since the early 1970s and the commercial Jeep brand. The earliest SUVs were scaled down versions of military vehicles used in World War II and Korea. Believe it or not, the history and design of military SUVs actually plays a role in how much it costs for insurance today.

When a driver is looking to buy cheap SUV insurance, he or she just wants to get the best policy at the best price. Nevertheless, the insurance companies are also pursuing their own agenda. They want to offer a suitable policy without exposing themselves to unnecessary financial risks. So how does that play into the history and design of the SUV?

Despite the fact that there are now three classes of SUVs, they all have one thing in common: the perception that they are rugged vehicles capable of being driven off-road. Even if an owner never takes his or her SUV off-road, the capability exists for them to do so. That capability represents more risk to an insurance company.

Weight and Size

Two additional considerations for insurance companies are the weight and size of SUVs. For example, a compact SUV is no larger or heavier than a compact pickup truck. Insurance for a compact is pretty cheap. On the other hand, a full-size SUV is a large and heavy vehicle that costs more to insure.

Because the full-size SUV is larger and heavier, its potential to inflict damage is greater. Imagine a full-size SUV colliding with a compact sedan. Which do you think will win that battle? From a liability standpoint, the larger and heavier SUV cost more to insure because it can inflict more damage.

Replacement Value

The other thing to consider when you are looking for cheap SUV insurance is the replacement value of your vehicle. If it’s a few years old, the value has declined enough that it should not have a noticeable impact on your insurance rates. Nevertheless, if it’s brand-new, that’s a different thing.

Brand-new SUVs are very expensive to replace, partly due to consumer demand and partly due to manufacturing costs. When it comes to collision and comprehensive insurance, that replacement value adds dollars to your monthly premiums.

Purchasing SUV Insurance

When a driver starts looking for SUV insurance quotes a couple of things need to be kept in mind:

  • multiple quotes give a driver more options to choose from
  • insurance companies offer varying levels of coverage
  • there’s a difference between state and bank requirements

Every car insurance policy starts with state-mandated liability insurance. This is insurance you carry to protect someone else in the event that you cause an accident. Liability insurance does not cover your expenses. In addition to liability, some states require two types of insurance known as uninsured/underinsured motorist (UM) and personal injury protection (PIP).

Since state requirements will be the same for every insurance company, you will not find much difference in the rates they charge for basic coverage. The real differences start to show up when you add collision, comprehensive, glass, and other types of coverage. These the types of things to pay special attention to when you are comparing SUV insurance quotes.

For the fastest cheap car insurance quotes possible, you might want to use a website just like this one. In fact, while you’re here you might just as well enter your zip code into the box on this page to get the quote process started. Our system collects your information and submits it to multiple insurance companies working in your area. In no time at all, you will have all the quotes you need.

How to Get Cheap Car Insurance

Is finding cheap, full coverage car insurance important to you? If you’re like most Americans, it is. None of us wants to pay more than necessary. The good news is that there are great rates available out there if you know where to look for them.

Affordable Full Coverage Car Insurance

Before discussing the idea of finding a policy, let’s first define full coverage car insurance. By “full coverage” we mean a policy that includes at least minimum liability plus collision and comprehensive. If your state requires personal injury protection (PIP) or uninsured/underinsured motorist coverage (UM), they are part of full coverage as well.

The idea behind full coverage car insurance is to get a policy that covers you against the most common problems. Since there is no possible way to cover yourself against every possibility, you decide what coverage you need and get the appropriate policy.

Compare Cheap Car Insurance

Finding and Purchasing Your Insurance

The key to finding the cheapest insurance around is knowing where to look. You basically have three options from which to choose:

  • Independent Agents – Local, independent agents sell car insurance policies on behalf of providers. They may represent nationally known companies, regional insurance companies, or a combination of both. The thing to remember is that independent agents are only allowed by law to represent a certain number of insurance providers.
  • Insurance Companies – You can choose to search for your cheap car insurance by contacting individual insurance companies by phone or online. This used to be the way most Americans did in days gone by. It’s effective, but it’s also time consuming.
  • Online Broker – The easiest way to get cheap full coverage car insurance is to use an online broker. This website is a great example. We collect your information using a simple online form you can complete in just a few minutes. We then send that information to multiple car insurance companies who use it to provide you with quotes.

Comparing Quotes

It wouldn’t do you much good to get car insurance quotes from multiple companies and then do nothing with them. So what do you do? You compare each quote against the others by looking at each item side-by-side. The idea is to determine what coverage each company is offering as well as the final cost of the policies.

When you are comparing, you also want to look at payment options. You should be able to pay for your policy in full or in quarterly or monthly installments. You’ll get the best deal if you can afford to pay entire bill in full.

If you should choose quarterly or monthly installments, your insurance company will probably charge you for that privilege. Finance charges, surcharges and administrative fees are all part of installment plans. Common sense dictates installment plans will cost you more money in the long run.

Compare Prices Annually

So now you’ve gone to all the trouble of finding cheap full coverage car insurance you’re happy with. Is that all there is to it? No. If you want to always make sure you are not paying more than you have to, you should compare policies at least every year.

The company offering the best price today may not be the same one with the best price next year. So comparing prices every year it is essential. Thankfully, when you use a website like ours annual price comparisons are very easy.

Finding cheap full coverage car insurance is not a matter of chance. It’s a matter of taking the time to look around, compare quotes and make wise choices.

5 Steps to Cheap Car Insurance

If you want to find the cheapest car insurance possible, we’d like to help. Fortunately, it’s not as difficult as it might seem. Gone are the days of having to call multiple insurance companies and listening to long-winded sales pitches. In fact, you do not even have to use the phone.

The information age has now made it possible to search online for multiple insurance quotes from the privacy of your own home. All you need is a computer and an Internet connection. In less time than it takes you to cook dinner, you can have all the quotes you need.

Just follow these five steps to cheap car insurance:

  1. Assess Your Needs – Before you can begin shopping you need to know what it is you are looking for. Find out what your state requires, what your bank requires, and what others recommend. You’ll be looking at things like liability coverage, collision and comprehensive, full glass, etc.
  1. Obtain Your Quotes – The key to cheap car insurance is the quote process. As stated earlier, the fastest and easiest way to get multiple quotes is online. On a site like ours, you simply enter your information once and sit back while insurance companies send their quotes directly to you. The more quotes you can get, the more likely it is you’ll find the cheapest car insurance possible.
  1. Compare Your Quotes – Taking the time to get multiple quotes doesn’t do you any good if you do not compare them. Quote comparisons should be done side-by-side so that you can directly see the relationship between what a company is offering and what you are paying for it.
  1. Encourage Competition – By comparing quotes, you’ll be able to narrow them down to your top two or three choices. That’s when the fun begins. Contact all of the companies that made the cut and explain to them the quote offers you received from the others. Let them battle it out see which one will offer you the best coverage at the best price.
  1. Choose and Purchase – The final step to cheap car insurance is to choose and purchase your policy. But don’t forget, prices may change again a year from now. You should review your insurance policy annually and get some new quotes.

Hidden Details

Now that you know the five steps to cheap car insurance, there are some hidden details of which you need to be aware. First, the numbers you get from your quotes are not set in stone. Each of the companies that make your final cut will need to check the information you supply against your driver history, employment records, credit history, and so on.

If it turns out you weren’t truthful with the information provided, you are almost certainly guaranteed to be given a higher price when all is said and done. What does that tell you? It should tell you to be open and honest whenever you are filling out quote information.

The other hidden detail comes by way of payment options. Most insurance companies offer three choices:

  • full payment at the beginning of the policy term
  • quarterly installments (one payment every three months)
  • monthly payments

If you want the cheapest car insurance possible, choose the full payment option. If you choose one of the other two options, you’ll be paying surcharges and administrative fees. Of the three options, paying monthly is the most expensive. It may be a more manageable payment than the lump sum but, over the course of 12 months, you could end up paying a lot more this way.

How to Save Money on Car Insurance

How to Save Money on Car Insurance
(Click to Enlarge)

Drive Safely – Being a safe driver will save you money. Most insurers offer Safe Driver Discounts, which can shave 25% off premiums. Accidents and traffic violations raise premiums.

Be a girl – 73% of all people killed in car accidents are men. Not a factor you can control; however, women are statistically better drivers.

Ain’t No Love in the Heart of the City – Statistically, there are more cars on the roads in cities, which mean there is more chance of hitting one. Additionally, levels of crime are higher in urbanized areas. Drivers in rural areas pay less for insurance.

Change your job title – occupations with the lowest auto insurance rates include:

  • Scientists
  • Pilots
  • Actors
  • Artists

All jobs that require attention to detail and translate well into safe driving habits.

Occupations with the highest auto insurance rates include:

  • Real estate brokers
  • Social workers
  • Executives
  • Business owners
  • Architects
  • Judges
  • Doctors

All stressful jobs with long working hours.

The rate of car accidents for doctors is only slightly lower than that of teen drivers.

Get married – A married person statistically pays less for car insurance than a single person with an identical driving record does. Insurance can cost as much as 50% less for married people, amounting to savings of up to $1,500.

Pay upfront – some insurance companies charge an extra fee for month-to-month premium payments. This can be as much as $10 a month, which equates to $120 a year!

Grab a discount – Driver discounts can mean savings in the range of 10%-20% off the bottom line. Discounts include:

  • Deductible discounts – shoulder small losses and raise deductibles from $200 to $500 and save 15%-30% on comprehensive premiums
  • Safety feature discount – Airbags, daytime running lights, and ABS will all reduce premiums.
  • Good student discount – For high school and college discounts over the age of 16 maintaining a B or better grade average.
  • Multiple policy discount – Given to individuals that take out more than one policy with an insurer.

Sources:
http://thelawdictionary.org/article/how-expensive-are-car-insurance-rates-for-married-people/
http://lifehacker.com/pay-for-the-year-up-front-to-save-on-car-insurance-1152684911
http://www.dmv.org/

Why Your Insurance Premiums May Increase Even Though You Didn’t File a Claim

When your car insurance premium comes up for renewal each year, you may see something unexpected: the premium has increased by a significant amount.  This can be very shocking if you have not filed a claim, had an accident, or even gotten a speeding ticket.  There are a number of other factors that can affect your premium, and you have no control over any of them.  However, there are a few things you can do if you find your rate has become higher than you’d like.

Financial Data

Causes of Insurance Premium Increases

  • Natural disasters.  Things like hurricanes, major tornadoes, and severe ice storms all cost insurance companies money.  In fact, a single tornado can cost an insurance company several million dollars or more.  That leads to a price increase just to cover their expenses – in most cases they are still not making a profit.  These disasters affect all areas of insurance.  While they most often pay out on car and home policies, motorcycles, boats, all-terrain vehicles, and even life insurance policies may have to be paid out during the worst storms.
  • Interest rates are lower.  What does that have to do with your premium?  Well, when an insurance company collects your premium, they do not simply put it in an account or use it to pay their bills.  Instead, they invest a portion of it in bonds and stocks.  Lately, the interest rates on bonds have been shrinking, and while the stock market is recovering from the late-2000s slump, it is still not as strong as it once was.  This means insurance companies are not making as much interest, which in turn means they do not have any extra income to subsidize their payouts.  They often count on this money to cover all of their costs, and since they haven’t been getting it, they have either to increase rates or operate at a loss.

Your Options

If your premium increase is not a result of something you have done, you have a few different options.  First, you can increase your deductible.  This means you’ll have to pay out more if you have an accident, but if you are a good driver, this should not be a concern.  Of course, if you have already set your deductible at its highest, you may not have this option.  You could also change the amount of coverage you have.  However, this isn’t an option if you are still paying on your car since the loan company will require full coverage.

Do you qualify for any discounts you are not getting?  Check with your insurance company to make sure something hasn’t been overlooked.  For example, you have joined an organization like AAA recently, that discount may not be reflected on your policy.

Your best option, though, may be to start looking for new car insurance.  It can be a hassle to change insurance companies, but if you save a significant amount, it is certainly worth the work.  Do some comparison-shopping and see what other insurance companies can offer you.  You may find that you can get the same amount of coverage for less elsewhere.

Additional Reading:

 

 

A Guide to Car Insurance Deductibles

A car insurance deductible is one of those things most of us have written into our policies, but few of us rarely think about. Yet deductibles are an important part of your insurance decision when it comes time to renew an existing policy or purchase a new one. The amount of your deductible has a direct effect on your premiums.

In case you’re wondering, deductibles apply to other types of insurance as well, including health and homeowners insurance. The principal works the same regardless of the type of insurance policy you are talking about.

Car-Insurance-Deductible

Definition of Deductible

As much as you and I want cheap car insurance, insurance companies want customers willing to think long and hard before filing a claim. They do not want customers making claims for every little scratch and dent because it just becomes too expensive. They also do not want customers committing insurance fraud. For both of these reasons, deductibles are widely used.

A deductible is a certain amount of money you agree to pay, out of your own pocket, in the event of an accident or liability claim. If you have an accident that causes $2,000 damage to your car for example, the insurance company pays you $1,500; you pay the remaining $500 yourself.

The deductible forces you to put some “skin in the game.” It also encourages you to be more careful and avoid frivolous claims. The good part about it is that you can adjust your deductibles up or down to meet your budget.

Deductibles and Premiums

The amount of your deductible affects how much you pay in annual premiums. If you choose a higher deductible, you get a lower rate in return. It’s all a matter of assumed risk. The more risk you are willing to take, the less risk your insurance company has to take. That results in lower rates.

Be advised that insurance companies have set minimums for deductibles. Using the $500 amount as an example again, let’s assume that’s the minimum deductible allowed by your insurance for collision and comprehensive. You can raise that deductible to $1,000 or $2,000, but you’ll never be able to go lower than $500.

As for how much money you can save by choosing a higher deductible, that’s entirely up to how your insurance company calculates premiums. You can always get in touch with the representative and ask. However, even if it’s just $100 a year, that could add up to several thousand dollars over a lifetime of driving.

Beyond the Deductibles

It’s true that deductibles play a role in determining how much you pay for car insurance. Nevertheless, if you want the cheapest car insurance possible, keeping your rates low goes well beyond just accepting a higher deductible. It involves understanding how your rates are determined and taking advantage of the opportunities you have to keep them down.

One of the most important things you can do is maintain a clean driving record. That means you drive safely and obey the law whenever you are behind the wheel. Remember that every accident and violation on your record adds to the total amount you are going to pay. And while it’s true time erases blemishes from your record, they’re not erased immediately. Some things can remain on your record for as long as seven years.

The other important thing you can do is shop around. Whenever you are renewing the policy or buying a new one be sure to get quotes from at least five or six companies. Only when you compare those quotes will you be able to find the most affordable car insurance.

Don’t Ignore State Insurance Regulations

If there’s one thing that makes understanding car insurance difficult, it’s state regulations that can be administered by insurance departments or motor vehicle departments. Making matters worse is the fact that the laws differ from one state to the next.

From the perspective of the driver, it is never a good idea to ignore state regulations. Doing so can land you in a boatload of trouble. Depending on your state, violating car insurance laws can result in:

 

  • Hefty fines and penalties
  • Suspended registration, plates, and license
  • Expensive reinstatement fees
  • Jail time in some cases.

state-regulations

Minimum Insurance Requirements

The most important thing you need to know is what your state requires at a minimum. With the exception of Iowa and Virginia, every other state requires drivers to somehow prove they have the financial means to cover an accident in order to legally drive a vehicle.

Some states allow drivers to cover that responsibility through cash deposits or surety bonds. Most accept only a liability insurance policy as proof of financial responsibility. Therefore, you need to know where your state draws the line on this. In all likelihood, you are going to be required to purchase insurance.

Along those same lines, every state requires car insurance policies to start with minimum amounts of liability. Liability insurance covers the injuries and damage you cause in an accident that is clearly your fault. Using Nebraska as an example, minimum liability amounts are:

 

  • Bodily injury or death (single victim) – $25,000 per accident
  • Bodily injury or death (multiple victims) – $50,000 per accident
  • Property damage – $25,000 per accident.

Experts agree the minimum amounts are not nearly enough based on the current costs of healthcare and car repair/replacement. If you have assets you want to protect in the event of a lawsuit, you should consider raising your liability limits.

When Insurance Is Required

When insurance is required is another important thing to know. For example, the state of New York requires all drivers to have an insurance policy in place BEFORE a vehicle can be registered. Drivers must include an insurance ID card with a registration application.

Other states allow registrations to take place without insurance in force. In those cases, it is still illegal to drive without insurance, but insurance does not affect the registration of a vehicle.

There are a handful of states, like Arizona for example, that allow you to take a vehicle off the road and remove the insurance without having to surrender the registration and plates. In such a case, you’d have to fill out a form detailing your plans for the vehicle. You will not be able to legally drive the car again until you purchase at least a cheap car insurance policy.

SR-22 Insurance Requirements

Lastly, every state has some sort of regulation relating to what is known as the SR-22. The SR-22 is a legal instrument stating you have the financial resources to maintain proper car insurance. If you are required to maintain an SR-22, you will have to check with your state for the details.

Unfortunately, an SR-22 requirement is likely the result of allowing your insurance to lapse or being found guilty of a major violation like DUI/DWI. An SR-22 means you can forget about cheap car insurance for a while. You will be included in a high-risk pool until your SR-22 runs out.

Varying state laws can make car insurance a complicated business. So before you begin searching for an affordable car insurance policy, make sure you know the law in your state. If you are planning to move from one state to another, keep in mind things will be different. You will likely have to start over with new insurance.

Car Insurance Coverage with No Down Payment

Offering car insurance coverage with no down payment is one of the hottest trends in the insurance business right now. Many companies are doing it. Apparently, they have discovered there is an untapped customer base looking for this option. A customer base willing to pay extra to get it.

As a matter of clarification, car insurance policies with no down payment requirement are policies on which the customer is paying via an installment plan. By definition, this type of policy is not being purchased by someone who pays the entire bill up front.

zero-down

Down Payments and Installments

Down payment and installment programs go hand-in-hand when it comes to car insurance. Depending on your coverage and the length of your policy, there are several different options for installment payments:

  • Semi-annual payments (on a 12-month policy)
  • Quarterly payments (on both 6 and 12-month policies)
  • Monthly payments on policies of any length.

When a consumer chooses to pay for car insurance through installments, he generally has to put some money down to get the policy started. The first month’s payment is usually sufficient.

Choosing the No Down Payment Option

Insurance companies do offer an option of no down payment for those customers who need insurance now but do not have the money in the bank. This is a great option if you find yourself in an emergency situation or your budget does not allow for an immediate down payment.

Keep in mind that while some insurance companies do offer this option, that does not mean all of them do. You may have to search around to find a provider in your area willing to sell you car insurance this way. You might even be forced to purchase your insurance through a local broker rather than directly from the car insurance company itself.

No Down Payment, Higher Premiums

Now that you know a little bit about both down payments and the car insurance with no down payment option, you need to ask whether or not this type of insurance is right for you. While the opportunity to get cheap car insurance with no money down is appealing, it actually costs you more in the long run.

Here’s what you need to know about car insurance: it’s all about managed risk. Car insurance companies take the money we pay in premiums and invest it in different types of securities. That’s how they can still make a profit even though they might pay thousands of dollars in claims for people who only put a few hundred dollars into the system.

When you choose the no down payment option, your insurance company is providing coverage without getting any money in return. And although this is a short-term situation, they are risking a great deal given the fact that you could have an accident before your first monthly payment comes due.

What does all this mean? Higher premiums for you. If you select the no down payment option, you will pay higher premiums as well as additional fees and surcharges. Any benefit you may have received by getting insurance without a down payment is certainly wiped out by the added costs.

A Better Way

If you are willing to forgo convenience in favor of spending less money on car insurance, there is a better way to cover your car without going the no down payment route. If you want to enjoy maximum savings, then save enough money to pay your policy in full. You will get the best deal, the best coverage, and you still will not have to worry about down payment.

Car Insurance for Teens and Young Drivers

Two phrases that typically do not go well together are “car insurance” and “teens and young drivers.” So what’s the problem? Prices. Teens and young drivers pay the highest prices in the car insurance industry. In fact, they can be high enough to cause a real financial burden on young people.

As the parent of a teen or young driver, you may be asked to shoulder some of the financial responsibility for the time being. There are things you can do to help keep a young driver’s premiums as reasonable as possible. Let’s discuss some of those things.

Teenage-Driver

Your Policy, Your Car

The reason young drivers pay so much for car insurance is that they are more dangerous behind the wheel. Statistics from the CDC show that young people between the ages of 15 and 24 are responsible for 30% of all traffic accidents in America, despite making up only 14% of the total number of drivers on the road.

By keeping your teens and young drivers on your policy, and driving your vehicles, you reduce the risk enough to see a difference in insurance rates. Insurance companies assume a couple of things here:

  • Less Frequent Driving – Since everyone in a household must share common vehicles, having your teen drive your car means he’ll have less access to it than he would his own vehicle. In theory, this reduces both the amount of driving he does and the likelihood he’ll have an accident.
  • More Responsible Driving – The other thing car insurance companies assume is that teens and young drivers are more responsible with their parent’s cars than they would be with their own. This increased sense of responsibility hopefully leads to safer driving.

Vehicle Assignment

When you add a teen or young driver to your policy, your insurance company will automatically assign that driver to the most expensive vehicle. They do so as a matter of protecting themselves. But be aware you do not have to settle for those default assignments.

Instead, you can insist your young driver be assigned to the least expensive vehicle. In so doing you will reduce your annual premiums. Assigning a driver to a specific vehicle does not mean he can only drive that car. It simply means that’s the car he will drive most often.

Ask About Discounts

Discounts are great way to save money on your car insurance. Where teens and young drivers are concerned, one of the more popular discounts is one given for good grades. Assuming your young driver is still in high school or going to college, he could qualify for the good grades discount by furnishing a copy of the appropriate paperwork from his school.

You may also qualify for additional discounts including those for multiple drivers, multiple vehicles, safe driving, and bundling your policies together. As long as discounts are available, you might as well use them to offset the cost of insuring a young driver.

Educating Young Drivers

The most important thing you can do where young drivers and car insurance is concerned is to educate those drivers. Most young people do not understand how the insurance system works and, as a result, it never occurs to them that the way they drive will affect how much they pay.

Educate your teens and young drivers about the importance of being safe and legal at all times. Even the slightest blemish on their driving histories could increase their premiums. Eventually your teens will grow up, move out, and get their own vehicles and car insurance. Until then, make sure they know how things work.

Sources:

  1. Freeway Insurancehttp://www.freewayinsurance.com/insurance-options/auto-insurance-rates/types-of-auto-insurance/teen-car-insurance/

Monthly Car Insurance

Car insurance is something we all have to have to drive legally, right? But sometimes getting a policy costs more than the budget allows. In these types of situations there is something known as month-to-month car insurance. This insurance offers you all of the protection of standard car insurance with a monthly payment option.

It is important to understand that there are pros and cons to month-to-month car insurance. For some people it is the right option, for others it’s not. Before you choose this type of car insurance, you need to know how it works and how it will affect your finances.

Month-To-Month-Car-Insurance

Monthly Car Insurance Explained

Month-to-month car insurance is also referred to as monthly car insurance. This is a better term because it more accurately describes what is taking place here. For example, if you were renting an apartment on a month-to-month lease, it would be completely open-ended with either party being able to back out within 30 days. Monthly car insurance does not work that way.

When you purchase monthly car insurance, you are still purchasing a policy that extends for either 6 or 12 months. The “monthly” part of the equation simply applies to how often you are making payments. Rather than paying the full policy up front, you are making monthly payments right along with your rent, utilities, and so on.

As for what monthly car insurance covers, that depends on your provider. The most common types of coverage are:

  • Standard liability
  • Personal injury protection (PIP)
  • Uninsured/underinsured motorist (UM)
  • Collision and comprehensive
  • Full glass coverage.

Benefits of Month-To-Month Car Insurance

There are two main benefits of purchasing your car insurance month-to-month. The first comes by way of your budget. Just as some people find it more affordable to budget their utility bills over a 12-month span, it is often easier on the monthly budget to spread insurance payments throughout the year.

The second benefit is a low down payment. In most cases, the down payment is no more than a single month’s premium. There are even some insurance companies willing to allow drivers to walk away with insurance without requiring any down payment at all.

Disadvantages of Month-To-Month Car Insurance

The primary disadvantage to monthly car insurance is that, in the long run, it ends up costing you more money. There are two reasons for this.

First, it costs your car insurance company every time they have to process a payment. To make up for the additional costs, they tack on fees and surcharges. If you total up all of your monthly payments, you will find that you are paying more over the life of your policy than you would have paid had you chosen the upfront payment option.

Second, you are likely to be offered the minimum amount of coverage allowed by law. By paying every month you are subjecting your insurance company to a greater risk of loss; losses they will attempt to mitigate by limiting your coverage.

If you truly cannot afford to pay your entire car insurance bill up front, monthly insurance at least gives you the option of keeping your car on the road. However, we would urge you to do your best to avoid the month-to-month option if you can.

Try putting away some money into savings right now if you know you are going to need new insurance in the future. By saving, you’ll be able to pay for your new policy in full, upfront. Then you can take the money you would have paid toward monthly premiums and put it into savings for renewal time. You’ll earn interest and pay less for your insurance.

Adding Drivers to Your Policy

Sometimes circumstances require a driver to include additional drivers on his car insurance policy. Additional drivers can include teenage children, parents, and even friends and acquaintances. It goes without saying that adding drivers to your policy will increase your insurance rates. But relax; it’s not all bad.

Depending on the reasons for adding a driver, you may actually get away with a cheaper rate in the long run. That’s provided the additional drivers have a clean record and have been driving for a significant amount of time. However, these are all things to know ahead of time. That way, you are not caught off guard with higher than expected rates.

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Adding Teenage Drivers

The most common scenario is when parents add their teenage drivers to their policies. When this becomes necessary depends on how your car insurance company operates in relation to state laws. There are two possibilities most fall under:

At the Time of Permit – Some insurance companies require you to report your teenage children as soon as they earn a learner’s permit. Your insurance rates may not go up right away, but your insurance company still needs to know your teenager will be driving your vehicle.

At the Time of Licensing – If your insurance company does not require reporting a child with a learner’s permit, you’ll definitely have to report that child once he earns his license. It’s understood that a fully licensed driver has access to your vehicles and will be driving them.

Unfortunately, when it comes to teens there really is no such thing as cheap car insurance. Teens pay the highest rates of anyone because they are, as a group, responsible for the largest number of serious accidents. For male drivers between the ages of 18 and 25, rates are the absolute worst.

Adding Parents

Another common scenario is when drivers add their parents to their policies. This may happen if your parents move in with you on a permanent basis. Whether they own their own vehicles or plan to drive yours, they should be reported to insurance company unless they plan to maintain their own car insurance.

This is one case where adding the extra drivers may save you money in the long run. For example, let’s assume your parents no longer own a vehicle. Your insurance company will assume they will have access to your vehicles if they are licensed. Also assuming your parents have been driving for decades and have a clean record, they actually help you by reducing your overall rate.

Your parents’ safe driving record, combined with discounts offered to older drivers, could mean that each of you pays less. Thanks to parents, cheap car insurance can be possible with a combined policy covering everyone living in the same household.

Failing to Add Drivers

Failing to add drivers when necessary is where this gets sticky. As a rule, you are required to add any drivers who live in your house and have a license. The only exception would be the driver who has his own insurance policy. All others would have to be added to your policy.

If you fail to add these drivers, you may get into trouble in the event of an accident. Why? Because state laws allow insurance companies to refuse claims on accidents involving drivers that have not been reported. This doesn’t apply to temporary guests who do not live in your house.

In the end, it’s always best to report drivers living with you. Doing so may prevent you from getting the cheapest car insurance, but it’s better than the alternative of being denied a claim because you failed to add them.

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