Cheap Car Insurance
Cheap Car Insurance offered on the Internet has created even more competition between car insurance companies. It is easier than ever for consumers to shop for the lowest insurance rates, to analyze coverage, compare premiums, and find cheap car insurance.
An insurer is a company that sells insurance. An insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, and establishing Insurance Rates has evolved as a discrete field of study and practice.
Auto insurance risk underwriting is the process by which vehicle insurers determine whether or not to insure an individual and what insurance premium to charge. Often, the insurer will have more freedom to set the price on physical damage coverages than on mandatory liability coverages.
When the premium is not mandated by the government, it is usually derived from the calculations of an actuary based on statistical data. The premium can vary depending on many factors that are believed to have an impact on the expected cost of future claims.
Those factors can include the car characteristics, the coverage selected (deductible, limit, covered perils), the profile of the driver (age, gender, driving history) and the usage of the car (commute to work or not, predicted annual distance driven).
Conventional methods for determining costs of motor vehicle insurance involve gathering relevant historical data from a personal interview with, or a written application completed by, the applicant for the insurance and by referencing the applicant’s public motor vehicle driving record that is maintained by a governmental agency, such as a Bureau of Motor Vehicles.
Such data results in a classification of the applicant to a broad actuarial class for which insurance rates are assigned based upon the empirical experience of the insurer.
Many factors are deemed relevant to such classification in a particular actuarial class or risk level, such as age, sex, marital status, location of residence and driving record when searching for cheap car insurance.
Current insurance rating systems also provide discounts and surcharges for some types of use of the vehicle, equipment on the vehicle and type of driver. A common surcharge is for Business use.
Cheap car insurance will take advantage of the various discounts.
Safety equipment, (airbags, antilock brakes, theft control devices, passive systems (e.g. The Club), alarm system, etc.) will quialify you for discounts on your car insurance premium.
Other factors that count for possible discounts are good student, safe driver (accident free), groups, senior drivers and fleet drivers.
The conventional rating systems are based on past realized losses and the past record of other drivers with similar characteristics. Recently however, electronic systems have been introduced whereby the actual driving performance of a given driver is monitored and communicated directly to the insurance company. The insurance company then assigns the driver to a risk class based on the monitored driving behavior. Some systems require GPS and Telemetrics as part of the policy.
An individual, therefore, can be put into different risk classes from month to month depending upon how they drive. For example, a driver who drives long distance at high speed in one month might be placed into a high risk class for that month and pay a large premium.
If the same driver drives for short distances at low speed the next month, however, then he or she might be placed into a lower risk class and charged a lower premium.
One electronically monitored auto insurance program called MyRate gives drivers a customized insurance rate based on how, how much, and when their car is driven. MyRate is currently available in Alabama, Kentucky, Louisiana, Michigan, Minnesota, Maryland, New Jersey and Oregon.
Driving data is transmitted to the company using an on-board device. The device connects to a car’s OnBoard Diagnostic (OBD-II) port (all automobiles built after 1996 have an OBD-II.) and transmits speed, time of day and number of miles the car is driven.
There is no GPS in the MyRate device, so no location information is collected. Cars that are driven less often, in less risky ways and at less risky times of day can receive large discounts.
Progressive has received patents on its methods and systems of implementing usage-based insurance and has licensed these methods and systems to other companies. Progressive has service marks pending on the terms Pay As You Drive and Pay How You Drive.
One way to bring your insurance premium down is to assume a higher risk. Drop your collision insurance on an older car. If the car is worth less than $2,000, you’ll probably spend more insuring it than it is worth.
Automobile insurance deductibles apply to the comprehensive and the collision sections of your policy. Both of these parts of your car insurance policy are optional. The deductibles for each can be different. Your deductible reduces the amount your insurance company will pay to repair or replace your automobile.
Comprehensive automobile insurance is the part of your auto insurance policy that pays when your vehicle is hit by a falling object, damaged by fire, stolen or vandalized. The cost of a broken window is also covered under the comprehensive section of a personal auto insurance policy. Comprehensive coverage is also called “other than collision” coverage.
Another way to lower your insurance costs is to ask for a higher deductible. The deductible is the amount of money you have to pay before your insurance company begins paying the rest.
The most important part of any car insurance policy is the liability protection. What is liability protection? It is the aspect of the car insurance that covers you from any claim of damages by a third-party.
Why would a third-party be claiming damages? Probably because you were in an accident with them and they believe you were the cause of the accident. This can make you liable for the repairs or replacement of their car as well that their medical damages.
A big source of savings is to insure your cars with the same company that insures your house. Make sure you ask if combined coverage is available. This will lower your payments on your car’s insurance and make your homeowner’s policy cheaper too.
Make sure you are getting a renewal discount that many insurance companies offer. This is a discount given to people who have been with the same insurance company for an extended period of time.
If you have carried insurance with a company for several years, and not had an accident, your insurance company wants to keep your business.
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