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Things to
keep in mind
Inquire about discounts (such as multiple policies with the same
company, multiple vehicles, airbags, anti-theft device, etc.) and/or
surcharges the company applies. Not all companies will offer the same
type of plans or have the same underwriting rules (eligibility/
acceptability guidelines). Therefore, it is critical to ask for this
information.
Make sure you know the length of the policy term. Policies can be six
months (semi-annual) or one year (annual), depending on the insurance
company.
Many companies have their own payment (installment) plans that allow
you to pay the premium over a period of time, sometimes for a fee. If
you decide to buy a policy on an installment plan, find out the
applicable service fees.
If you use a premium finance company to pay for your insurance, the
monthly payments may be easier; but the total of payments will be
larger. Finance agreements are separate contracts that often include a
limited power of attorney that gives the finance company some
authority over the termination of your policy. Moreover, if the policy is
cancelled, the insurance company must remit all return premiums to the
finance company, who will apply them to your account.
Ask about higher deductibles. By requesting higher deductibles on
comprehensive and collision coverage, you may be able to lower your
costs. However, remember that the deductible you choose is what you
are responsible for paying out of your pocket in the event you file a
claim against your automobile insurance policy.
Should you drop comprehensive and/or collision coverage on an older
car? It may not be cost-effective to have comprehensive or collision
coverage on cars worth less than $1,000 because any claim you make
would not substantially exceed the annual premium cost and deductible
amounts.
Personal effects and equipment such as cellular telephones, compact
discs, CD players and custom stereo speakers and systems that are
not permanently installed in the vehicle by the manufacturer generally
are not covered, unless specifically declared and added to the policy.
Read what you sign. Remember, you are ultimately responsible for the
accuracy and completeness of the information on your application.