By Josh Anish
1. You can only shop for car insurance when your current policy expires.
Many consumers don’t realize that they aren’t bound to their auto insurance coverage for the full term (ie – 6/12 months). The insured can cancel at any time, subject to fees that vary by carrier. In many cases, the carrier will charge a 10% fee on any unused premium. As a simple example, if you cancel after 3 months of coverage on a $600, 6-month car insurance policy, then you may be subject to a $30 fee. You should compare any fees with the potential savings you could get by switching your auto insurance coverage.
2. Working with a direct company is always cheaper than going through a local agent.
While it’s true that direct companies save money on costs by not incurring agent commission fees, this does not necessarily mean the savings will be passed on to you. Many direct auto insurance carriers will use those savings to spend more on marketing their brand and product. Without the benefit of local agents marketing for them, direct carriers may need to spend a bit extra to create awareness for their brand. In addition, pricing algorithms of car insurance policies are extremely dynamic and, as a result, there will be a large range in price for any single individual. As long as you are comfortable working with both a local agent and a direct carrier, it is always best to shop all available policies.
3. If your friend borrows your car, then your vehicle is not covered against damages.
In most cases, this is simply not true. Comprehensive and collision coverage will provide protection against any damages to your vehicle, regardless of the driver. However, if you explicitly excluded this friend from your auto insurance policy, then damages would not be covered. You should also note that any claims made could result in an increase in your Car Insurance premium. The Huttenlocher Group helps educate you about the various types of coverage to make sure that you select the one that best fits your needs.
4. Auto insurance rates automatically go down when you turn 25.
Age is an important variable in pricing models. Like any other variable in the pricing model, age is used to predict the likelihood that the insured will make a claim. While people under 25 are statistically more likely to get into an accident, each company handles the impact of age on the price of the policy differently. There is no hard and fast rule that once you turn 25, the price of your car insurance will decrease. Some carriers may offer a pricing break at 21, 23, or 30. There are a variety of other ways to receive discounts on your policy such as bundling a Homeowners or Renters policy with your auto coverage, paying your premium in full, or even choosing to receive paperless billing. It is important to check with each insurer on discounts you can qualify for when shopping for a new policy.
5. Comprehensive coverage covers theft of your vehicle and all items contained within.
Comprehensive coverage on your auto insurance policy only covers items physically attached to your vehicle. This may include your car stereo or GPS device if it is factory installed. For coverage on items contained in your cars such as iPads, clothing, and other electronics you will need Homeowners or Renters coverage. Many of The Huttenlocher Group carriers and agents make it easy for you to add such coverage when shopping for your auto insurance policy. Be sure to inquire with them if you are interested.