29 Aug 2008

What you don’t know about your car insurance policy could be costing you.First, if your friend borrows your car and crashes it, you’ll pay for it.You’ll have to file a claim with your insurance company, pay your deductible and that could cause your rate to go up.Also, don’t expect to get reimbursed if personal items inside your car are stolen.  According to insure.com, stolen or damaged items like compact discs aren’t covered by your car insurance.

Making a claim could increase your car insurance rates, but if you ask the right questions, that could determine by how much.Some insurance companies have “accident forgiveness” guidelines, so when you buy or renew your policy, ask how you can qualify.If you don’t drive much, consider “usage-based” car insurance.If your insurance company offers it, it can save you money because it allows you to buy coverage based on how much you actually drive.

If you drive very little, you could save up to 60 percent.Having no credit may affect your car insurance premium.According to insure.com, car insurers believe that your credit history is an indicator of whether you are going to make a claim and in some areas, they can price your insurance policy accordingly. Speaking of credit, not following the rules when switching insurance companies can hurt you.You must officially cancel your insurance policy when you switch companies.

So if you switch companies, but still receive a bill from your previous insurance company for your next premium, don’t ignore it. Contact the company to let them know that you have terminated the policy because if you don’t pay the bill, the company can cancel you for nonpayment, which goes on your credit record. If you can afford it, pay your annual premium all at once. Paying in installments can usually increase your overall bill.

"Fractional premium" fees are sometimes charged when you divide your annual premium payment into installments rather than pay for a year of coverage all at once. It can be as little as a few dollars per payment, but the more you break it down, the more it adds up. So when you apply for the policy, ask what the fees are for paying in installments.

Source:  http://www.abc15.com/content/