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What would you say if someone came along and told you that the very first time you get into an accident, even if you've had a flawless driving record for 60 years, you were going to watch your auto insurance rates climb 40%-possibly higher? You'd probably say it stinks, followed a quick and firm litany of the reasons that it just ain't fair. Guess what? You'd be right-and somebody in the auto insurance industry finally figured it out.
Welcome to the wide, wonderful world of accident forgiveness. A privilege reserved exclusively for those whose clean driving records have put them in a position to be given the benefit of the doubt after they've been in an accident. With accident forgive3ness auto insurance companies look at your driving history, see that you've been the insurance agent's best friend and agree to let the accident slide-this time.
Before you start to rejoice, however, there are a couple of things about accident forgiveness you really, really need to know:
1) First and foremost, not all insurance carriers consider accident forgiveness to be a part of their standard policy package. Some of them may ask that you pay a little extra each month to make sure you're covered-just in case.
2) Even if you are covered, there's no guarantee that your accident will be forgiven completely. Every company has its own policies, and they may use the extent of the damage cause by the accident to help them determine whether they want to leave your auto insurance rates untouched or if they're going to raise them-by considerably LESS than 40%! (2-10% is about normal in these cases.)
3) Forgiven doesn't mean forgotten. Your auto insurance company can only control what goes on inside their own hallowed halls. The accident is still going to be on your driving record, and the negative points that accident is going to cause is still going to have an extremely detrimental effect on your auto insurance rates if you decide to switch companies-even more incentive to love the one you're with!
4) Accident forgiveness usually depends entirely on whether or not you qualify for a five year good driver discount. They're willing to give you a second chance, but most auto insurance companies draw the line at three or four.
5) If you have a teenage driver in the house you may find that your auto insurance company is willing to extend your accident forgiveness credit to them, since you share a policy and any increases in your auto insurance rates are going to affect all of you.
Accident forgiveness can be the answer to your prayers when it comes to keeping your auto insurance rates from plunging you deep into debt. That 40% can really hurt when it gets right down to it! If you don't know if you qualify for accident forgiveness or not but are fairly certain you don't have any black marks on your driving record at the moment, feel free to pick up the phone and give your insurance agent a call. Remember, you've got nothing to lose-and everything to gain.
Are you looking for a way to save money on your auto insurance? Of course you are. We all are. Anyone who says they wouldn't love to have a little extra money in their pocket each month is probably lying through their teeth! It's tempting, then, to scale back by selecting "non-essential" expenses like your auto insurance and paring them down as far as possible. Saving money on your auto insurance is a great idea; however, there's a right way and a wrong way to save money on your auto insurance. Make sure you're doing it the right way!
So, what shouldn't you do to save money on your auto insurance? First and foremost, never give in to the temptation to purchase the first cheap auto insurance policy that comes your way just because it's cheap. Your auto insurance has to do a lot more than sit around looking pretty, and let's face it-when you're talking insurance you get what you pay for! It's worth a little extra money in premiums every month to make sure that if you're in an accident you've got all the protection you need.
The second thing you shouldn't do is pare your liability insurance down to the bare minimum. You'd be amazed at how many people out there are driving around with only minimum liability coverage! Lowering your insurance coverage levels is a simple, easy and 100% effective way to save money on your auto insurance; however, this is one of those times when it's vitally important to consider the consequences.
Minimum liability insurance generally offers less than $100,000 worth of protection if you're involved in an accident, which sounds like a lot more than it is when you consider that the average fender bender costs $1,200 to fix, and replacing an entire car can range from $5,000-50,000 or more. Then add in emergency room visits at $1,000 per person, hospital stays at $2,000-2,500 per day and ICU expenses of $5,000 or more per day and you begin to understand why that $100,000 isn't going to go as far as you think it will. Is your bank account strong enough to take the hit?
Comprehensive, collision and uninsured motorist insurance are another place where you can save money on your auto insurance-mainly by NOT having them. The question is, what are you going to do if your windshield is destroyed by hail? Or vandals trash your car? Or you slide off a snowy road, flip twice and land in the ditch? Without comprehensive and collision you're going to be left holding the bill-not to mention what's going to happen if you have an accident with an uninsured driver. Chances are good that if they can't afford auto insurance they're definitely not going to be able to afford to pay your medical bills and repair your car.
Finally, let's talk deductibles. Raising your deductible is a great way to lower the premiums on your auto insurance-and most insurance agents know it. That's why many insurance providers are able to save you money by lowballing their insurance quotes. What they're not telling you is your deductible is going to put you into the poorhouse-and if you can't pay your deductible your auto insurance coverage isn't going to do you much good anyway.
As you can see, there's a right way and a wrong way to save money on your auto insurance. Save money the right way. Your financial assets will thank you!