January 16, 2010

Auto Insurance Saving Traps Many People Fall Into

With the economic climate of the world today, it’s hard to determine which businesses are honest and which are out to scam customers to make money. Finding the right auto insurance company is especially difficult. With the number of insurance companies competing against one another, consumers are bombarded with messages regarding savings. Most people look to save money when it comes to purchasing auto insurance. Seeking out the best savings sometimes means people fall for savings traps that auto insurance companies may not be telling unaware customers about.

One thing to remember when purchasing auto insurance is that setting your deductible too high in order to lower monthly premiums will inevitably result in high pay-outs in the event of an accident. You must consider if a super high deductible would be worth it in the long run, should an accident happen. If you end up paying a $1,000 deductible, one accident alone could seriously hurt your financial situation. Another factor to consider when looking for savings with auto insurance coverage is opting out of getting the uninsured motorist coverage. In the event that you are involved in an auto accident with a person who is uninsured and has no assets to pay your damage costs, if you are not covered, you risk having to pay out of pocket for repairing damages. The high cost of paying for damages outweighs the amount you save each month from excluding this coverage.

Another auto insurance savings trap to be mindful of is added costs at the time of renewing your auto insurance coverage. More often than not, insurance companies slip extra costs into your policy in hopes that you won’t notice when you receive your renewal information. Further, when an insurance company offers a special discount that you qualify for, the discount isn’t automatically applied to your policy. Auto insurance companies hope that you do not notice the missing discount, and that they in turn will benefit from your mistake. Therefore, you may not notice you aren’t even receiving the discount, and your policy will continue without it. You must mention the discount to the auto insurance company if you want to receive it, and you must check your statement to ensure it is applied.

Auto insurance companies, like most companies, want to make money. Offering savings and discounts entices customers to want to sign up. It is important that as a consumer you are always aware of what is going on in your policy – especially in regard to your auto insurance quote, premium and deductible. Do your research and be cautious that where you may be saving in one regard, you may end up paying more in another.