Car insurance is a necessity and a requirement in most states. While state laws can vary, consumers who own a car usually need to work with insurance agents to get information about the rates and costs of covering the vehicle. Understanding what the agents are keeping back is an important part of getting the most out of auto insurance.
Credit History Importance:
Car insurance agents do not often make a big deal about credit history when providing quotes. Instead, they suggest that age, sex, years behind the wheel and the vehicle are the most important standards for setting the price.
The reality is that some companies will factor in credit history when looking for potential clients. Statistics have shown that those who are struggling to maintain their credit will also have a higher risk of filing claims. This is due to the financial inability to manage payments personally when minor problems occur.
Even those who have a pristine and almost perfect score must consider the possibility that their credit is a factor in the estimated cost of insuring the vehicle. This makes shopping around a vital part of getting the best possible deals because credit history is weighed differently based on company figures and statistics.
Agents Cannot Haggle:
Consumers often try to negotiate a lower price with insurance agents, but the fact is that the agent has his or her hand’s tied when it comes to issuing rates. Rates are issued based on factors like the qualifying discounts, the potential risks associated with individuals, statistical data and the particular company.
The company sets the price and the agent only has the power to put in appropriate discounts that apply to the individual. This means that haggling is out of the question. An agent cannot provide lower prices and does not have the right to haggle for a reduced expense to bring in new customers.
Lending is Costly:
Insurance agents will not discuss the cost of previously lending a motor vehicle, but it does impact the cost of insuring the vehicle. Those who have lent a car to friends or family only to have them get into a crash or obtain a ticket while driving are likely to see higher insurance rates.
This is not actively discussed by the agent because it can have a dramatic impact on the current rates. Those who lend their car to others are considered a higher risk due to the potential to lend the vehicle to individuals who have an unknown driver’s history.
As a general rule, it is best to only lend a vehicle if extenuating circumstances apply to the situation. Parents who have teen drivers should explain that their friends are not allowed to borrow the car since it has the potential risk that other teen drivers do not have a license and are not legally allowed to operate a motor vehicle. The car owner will face heavier costs from accidents or tickets that occur when the vehicle is operated by a driver who is not on the policy.
Red Cars Do Not Impact the Price:
It is a common myth that is simply not true, but most agents will not discuss the way a particular vehicle might impact the price. The reality is that red cars are not any higher to insure than the same model in black or white.
The color of the car is not a factor in determining the price of insurance. Agents will point out that the car impacts the price, but rarely disabuse consumer of the myth about red vehicles. As a general rule, the type of car and the statistics related to the type of vehicle are the key factors in increasing the cost. Color is irrelevant to the price.
Some Discounts Are Not Discussed:
While every insurance company will provide differing discounts and special rates, not all reduction opportunities are discussed. Agents will rarely provide the details of every potential discount, particularly if it is a little-known discount. It is therefore important to visit the website of the insurance provider, to see what offers are currently available.
Many companies will provide discounts on rates to drivers who do not smoke, who own a garage, who carpool, and even those who have a low-stress job. The risks associated with theft, vandalism, and accidents are lower for those who do not smoke, own a garage and have a low-stress job.
Car insurance agents are performing the task of finding out potential rates and helping apply discounts to an account. The problem is that the agents rarely discuss factors that might potentially reduce the rate further or that are causing rates to increase. This is why it is important to shop around for the best possible deals.
Sources:
- http://www.service.tas.gov.au/browse/Business+and+economy/Insurance/Motor+vehicle+insurance/
- http://www.fairtrading.nsw.gov.au/Consumers/Buying_services/Insurance.html
Author bio:
Chris is experienced internet marketer interested in key technologies to make your online business perform. During his career he worked for some of biggest Australian brands. Currently employed as marketing consultant for one of leading car insurance company in Australia, Real.
