Will Pay-As-You-Go Insurance Become a Popular Form of Auto Insurance?

In the tough economy, many people are struggling to meet their monthly financial obligations. Signing up for extended insurance policies is challenging for many households struggling to make ends meet. Many times this leads to paying for full coverage insurance on household vehicles that are not driven as the primary vehicle, making costs unnecessarily higher. Pay-as-you-go auto insurance is a new type of auto insurance that allows drivers to pay for their coverage based on the miles they drive over a certain period of time. The benefits of pay-as-you-go auto insurance allow policyholders to reduce their auto insurance bill substantially.

Obtaining an auto insurance quote simply gives an accurate estimate of monthly car insurance costs. Traditional car insurance coverage provides coverage for driving an immeasurable amount of miles each day and is based more on other factors, like the type of car and the driver’s record. A pay-as-you-go auto insurance policy provides the same amount of full coverage, but it is in proportion to the amount of miles driven — minimizing costs for those who drive less. For example, a stay-at-home parent may drive less than 10 miles each week. The secondary vehicle they drive may stay within the neighborhood and make a few shopping trips each month. Under a normal policy, this wouldn’t matter. However, in using pay-as-you-go auto insurance, this low mileage is a primary factor in the auto insurance rate and can drastically cut the family’s annual car insurance costs. The bulk of the car insurance costs would be for the family member with the long daily commute to work.

Like any other sort of car insurance, there are numerous variables that determine an insurance rate. However, unlike these policies, pay-as-you-go insurance will weigh the distance driven on monthly basis at a higher level. This being said, one also has to be aware of the mileage allotment a vehicle may have under this sort of coverage. Going over that number may result in additional fees for the driver.

Pay-as-you-go auto insurance is a great way to keep costs down. An increasing number of people who live in the city are commuting by train, bus, bike, or walking to work. Their vehicles are used exclusively for shopping during weekends, and a few short trips throughout the week. This group of people can greatly benefit from this sort of policy. Retired people and those that work from home can also benefit from this sort of car insurance coverage.

Monthly bills can be reduced greatly by driving less and using pay-as-you-go auto insurance. It is something every household should consider if a minimal number of miles are driven each month.

Leasing a Car and Its Effect on Auto Insurance

As you may know, many different factors affect the price of your auto insurance coverage. These include your age and the number of years you have been driving, as well as the make and model of your car. However, what you may not be aware of is that leasing a car can also have an impact on the cost of your auto insurance.

When you lease a car, you are obviously required to get insurance on the car. Purchasing auto insurance is necessary anytime anyone drives a vehicle. Unfortunately, you may find that the insurance costs for a leased car will be substantially more than if you had purchased a car straight out. This is because you are not the only person who gets to choose how much insurance coverage you will have. The company providing the lease also has a substantial amount of say in the coverage your car has — and they may require more than you normally carry.

While you may have previously been accustomed to keeping minimal coverage on your vehicles, the leaser will probably not approve of this. Don’t be surprised if they require you to keep full coverage insurance on the car throughout the entire leasing contract. After all, if you are leasing a relatively new car, the leasing company will want to be fully covered in case an unfortunate accident should occur. Keeping full coverage insurance on your leased car for the entire length of the lease can mean higher premium costs than what you are used to. Unfortunately, there is really no way to avoid this as the leasing company may not allow the lease to be finalized until proof of full coverage insurance is provided.

The leasing company may also require you to have gap insurance coverage. When you drive a new car off the lot, it depreciates in value dramatically from what you are actually paying on the car. Therefore, if you’re in an accident, the insurance you have only pays out the actual cash value of the car — which will be less than the loan is for. Gap insurance covers the difference between the actual cash value and the amount you paid for the vehicle originally. This type of insurance applies only to a lease that is 84 months or less. If a lease exceeds this time frame, then you would opt out of this coverage and depend solely on your full coverage in an accident.

So, when purchasing a vehicle, it may be best for you to buy the car as opposed to leasing it. You may have to put out more money up front, but it will save you in car insurance premiums.

Is the Auto Insurance Industry Recovering from the Recession?

While nearly everybody living in this bad economy has struggled, the auto insurance industry has been hit especially hard. So, is the auto insurance industry recovering from the recession? Two prime auto insurance companies beg the question.

Allstate Corp., the largest publicly traded personal lines insurer, has been trying to formulate a plan to keep itself afloat. Recently, the company has announced a few changes to adapt to the changing preference of customers. “Our goal is to have fewer, larger agencies that provide a more consistent experience for our customers,” said Thomas J. Wilson, chief executive of Allstate. He said that insurers who have traditionally used agents to bring in policyholders have to adapt to increased Internet use, which has a growing appeal for policyholders. Wilson estimates that nearly half of their policyholders initially make contact using Allstate’s easy-to-use website, rather than going through an individual agent to obtain coverage. To make sure they take advantage of that trend, those at Allstate are adjusting to accommodate customer preferences.

Wilson estimated that around 87 percent of Allstate’s Website prospects end up closing the deal with an agent. Therefore it is understandable why another big part of Allstate’s plan indicates the use of fewer agents with an “enhanced” local presence and consistent operations, as opposed to larger current agencies that may seem more impersonal. The presence of agencies, as opposed to completely depending on the Internet, is crucial to assist those customers who prefer dealing with an actual person. This face-to-face interaction gives agents the opportunity to offer other Allstate products, such as life insurance, which can obviously increase Allstate’s profits. “This would strengthen our agency force and ensure [the agents] remain a significant part of how we serve customers,” said Wilson. Shares of Allstate recently traded down 1.7 percent to $27.80 amid a generally down market for insurers

Also hit hard by the recent turn of events has been top insurance provider, Progressive. Auto insurance premiums rose for Progressive Corp. (PGR) in November from the previous year, as did the number of policies. Progressive said its November net profit was 80 million dollars. These numbers are down 42 percent from November 2008, when sales of securities boosted Progressive’s investment gains by more than $100 million. November premiums rose 2 percent from last year to $942.1 million, but total personal lines policies rose even more, up 5 percent to 10.97 million. This increasing numbers suggested a combination of sluggish prices, customers cutting back on coverage, and people holding back on buying more expensive vehicles to insure.

It seems the auto insurance industry is doing everything it can to make sure it stays on its feet and is able to offer consumers decent auto insurance rates.

5 Things You Need to Know Before Buying Auto Insurance

If you are purchasing a new car or are currently paying thousands of dollars into your auto insurance policy because of traffic violations, an accident or a low credit rating, shopping for auto insurance quotes may be worth your while. Buying auto insurance is one of those necessary expenses that you shouldn’t be passive about. When reviewing auto insurance quotes choose the one that gives you the coverage you need at a price you can afford. Before you sign up and accept the first policy that comes along, you’ve got to do a little work of your own. Here are five steps that may help.

1. Determine how much coverage you need. You want to be adequately covered in case of an accident, but you don’t want to pay any more than necessary. First, determine what is required in your state. Every state has minimum auto insurance requirements, and if you’ve got a car loan, the lien holder may have further requirements. This will tell you the minimum coverage. Then, it’s up to you to decide how much you need to feel comfortable.

2. Review the factors that determine your rate. Before buying auto insurance check your driving record, your current coverage and your current auto insurance rate. The best source for this information is your current insurance company. They’ll be able to tell you what you can expect to pay based on these factors.

3. Shop for auto insurance quotes. Now that you know what you need and what is affecting your rate, it’s time to shop for quotes. Begin online. A simple search engine search will yield dozens of auto insurance quote sites. Some sites will give you an instant quote, while others will contact you directly to assist you. Once you’ve reviewed all of the online options, start calling companies that couldn’t give you online quotes. With any auto insurance quote, ask the company to send you a copy of the written quote for your records.

4. Ask about discounts. When you are talking to an agent, don’t forget to ask about discounts. Insurance companies give discounts for multiple vehicles, a good driving record, safety equipment on the vehicle, a favorable credit score, certain organization affiliations and more.

5. Review and compare. Now it’s decision time. Before buying auto insurance you’ll want to check out the company. Often one quote will really shine as cheaper, but what happens when you need to file a claim? Visit your state’s department of insurance and out the satisfaction rate of the company you’re considering going with.

It’s a smart idea to compare quotes every couple of years to ensure that your auto insurance rate is competitive.

Avoiding Auto Insurance Fraud

Auto insurance fraud has been in existence since insurance became a marketable enterprise. This hideous scheme accounts for substantial loss for auto insurance companies. Unfortunately, even the unsuspecting public becomes victim to this repulsive act. What then should you do to avoid being victimized by rampant auto insurance fraud?

There are several guidelines you can take follow to avoid being a victim. First, arm yourself with sufficient knowledge about auto insurance. Be an informed consumer by researching and soliciting the best advice possible. One way to obtain this is through the biggest source around — the Internet. Search through various reputable insurance companies and study their features, weighing their good and bad points. Scour and compare auto insurance quotes from these insurance firms since premiums differ considerably from insurer to insurer. Avoid being scammed through overpriced policies by shopping around for the best deal you can find.

Now, if you happen to have an agent or broker, make sure that he or she is licensed. It doesn’t even hurt to ask for proof. Another way to verify would be to inquire at your local Insurance Licensing Bureau. The truth is that there are quite a number of unscrupulous agents out there who lure unsuspicious victims to pay on policies that are illegitimate or don’t provide proper coverage. You should be assertive and decisive, don’t just outright believe what the insurance agent is telling and dictating you to do. Regardless of whether it’s your first time getting car insurance or you’re a seasoned pro, speak up and voice your doubts about coverage you’re being offered. After all, your money’s at stake.

The insurance policy is another very important aspect of the insurance you should look into. Before signing, be clear on all the details of the policy and that all the coverage you requested is included — and that coverage you didn’t request isn’t. After you receive you policy, read it through thoroughly. Make sure that everything’s there and check if you have the correct coverage, limitations and the precise auto insurance quote as agreed upon.

And finally, be aware of drivers on the road looking to be involved in auto insurance fraud. These are the drivers who will cut you off in hopes of making you rear end them so they can collect on insurance payouts. To avoid being a victim, be fully aware when you drive. And, if in an accident, immediately call the local authorities and have the accident documented in details. Be alert, survey the accident scene and if possible take pictures of the vehicles, focusing on the actual damage.

Follow these steps, and you will improve your chances of avoiding auto insurance fraud.

Get Cheap Auto Insurance Quotes From a Reliable Auto Insurance Website

If you want coverage for your specific insurance needs, you will find that there are various auto insurance quotes for every requirement. It is recommended that you analyze the quotes properly prior to making a decision. It is good to have some knowledge about cheap auto insurance. Well, where does one who does not have any information on auto insurance go to? There are many online resources to help you in this context.

Certain things you should have in mind

Finding the cheapest auto insurance quotes should not be your aim, remember that as you research. The cheapest auto insurance policies are not always the best insurance to take the plunge for. So, look for cheap quotes that are also suitable for you. It is also necessary for you to know the auto insurance oriented rules in your state. There are some states that require you to have a ‘no-fault’ policy, and there are other states that ask you to have a comprehensive liability or third party liability coverage.

When searching online resources, it should be your aim to get affordable and high quality car insurance policies. You have to consider a lot of things to find out if the auto insurance plan will suit your budget and is adaptable to the needs of your family. The auto insurance quotes that you get online should be hassle free and simple. The online resource should be able to provide you detailed information on the auto insurance quotes and help you choose affordable as well as the best insurance plan for yourself.

After making a choice

When you have chosen the best auto insurance policy for yourself, that is also cheap, you need to go through the whole policy carefully. Now, go ahead with deciding on the policy period; it is important to keep in mind that your policy period is the time period that has been specified in your policy by your insurer. Usually the auto insurance policies cover a period of six months to one year. You can opt for a shorter or longer policy period. The longer the policy period, the lower premium you will have to pay.

One more thing you need to know is whether you have the option to cancel your auto insurance policy before the expiration date. Also be informed on the procedures that you need to follow for canceling your policy. The website providing you details of auto insurance policies, should be able to save your time and provide sufficient information on cheap auto insurance quotes. The major task is to get a reliable website; the other procedures for obtaining cheap auto insurance quotes will fall in place smoothly.