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How does an insurance company determine my auto premium?
They track their losses by driver, car, and location.
All combine to produce your rate. You are profiled by age,
years of driving experience, tickets and accidents, and how
much you drive. Cars are by value, cost of repair, and
frequency/severity of losses. The most controversial portion
of the rating system is by territory. Politicians make press
with this, call it redlining, but the fact remains that densly
populated areas have more traffic and therefore, more claims.
Hey, that's not fair, I've never had an accident!
Go to the head of the class. That's the flaw in any averaging
system (know anyone with 1.7 kids?) But the laws of large numbers
take over: a hundred people who are 40, with no tickets, drive Camry's,
and live in the country have lower claim costs than the hundred who
are 20, have two tickets, drive Corvettes, and live in the city.
Coverages
DO
- Buy liability limits at least equal your net worth as in
"I'll sue you for every dime," etc.
- Medical is inexpensive enough to be worthwhile.
- Even with our compulsory insurance laws, uninsured motorist
is critical.
DON'T
- Insure an asset worth less than your monthly income.
- Use your insurance dollars to protect you from a catastrophe,
not a nuisance.
- Avoid small deductibles.
- Collision on an older car.
- 'Extra' coverages, such as towing and rental.
DO go for the discounts:
- Insure all your cars with one company.
- The multi car discount can be 25% or more, and you avoid
limitations on coverage for non owned and newly acquired cars.
- A 3.0 or better average can save teens hundreds per year.
- Some companies give a discount for the number of years
you have carried continuous insurance (even if
with another insuror)
- Some offer credits to certain professional groups,
such as educators or engineers.
- Buy Homeowner's coverage from the same company.
MERCURY OFFERS ALL OF THESE DISCOUNTS!
Prepare to shop
With all your facts organized (feel free to use our
quote sheet; guilty if you don't
send one to us) call around and get quotes in writing.
There are three ways to obtain car insurance:
- Direct Writer - You call an 800 number and deal with
a company employee (21st Century© or GEICO©)
- Captive Agent - An agent who represents only one company:
(State Farm©, Farmers©, Allstate©)
- Independent Agent/Broker - An agent who represents a number
of companies (that's us!).
When to shop:
Remember the formula: rate = driver x car x location.
When one or more of these change, get on the phone.
- Company 'A' had a great rate for your Minivan, but is out of
sight on the new Turbo Belchfire you couldn't resist.
- Company 'B' is ok with the Belchfire, but you get a ticket;
now they want more than your car payment each month.
- Company 'C' now has the best deal, at least until Junior
gets his license, so it's back to 'A'.
- Then you get that big promotion, but have to move into the City
where 'A' has lousy rates........
Just about every company has a good rate for the adult with an
older car, clear record, and low coverages. The more your situation
differs, the more you can benefit by shopping.
Make one stop: The Howard Agency.
Fax, e-mail, or call.
No charge or obligation, just complete the
quote sheet.
Our system currently rates 150+ companies. We'll find the one
that offers YOU the best combination of price and coverage.
We can't help everyone, but our new clients save an average
of $392 per year on their car insurance.
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