inexpensive auto insuranceHave you ever wondered if your insurance broker is really trying to help you find the best most affordable policy for you?  Getting the most inexpensive auto insurance may seem like a daunting task but having a solid understanding of the basic auto insurance policy will go a long way to helping you keep your broker honest.  By understanding the different types of coverage’s and the rating categories that are available to the insured motorist you will be better able to tell if you are getting the best rates from the insurance company.  We will help you understand the major factors that go into underwriting an auto insurance policy and how knowing this can help you get an inexpensive auto insurance plan with the lowest premiums that you can live with.

Choosing an Inexpensive Auto Insurance Company

Getting an cheap inexpensive auto insurance policy is important but it should not be the only criteria you use when choosing an auto insurance company and their available plans.  You want to insure that your insurance company will be around and able to pay on your claim should you be faced with an accident.  There are several organizations you provide easy to understand rankings and ratings for insurance companies that will help you to determine their financial strength.
A few of the better know companies are A.M. Best Company, Moody’s Investor Services and Standard & Poor Ratings Information Services.  By examining these third-party ratings you can see compare various insurance companies to see how they stack financially.  So before you jump on the cheapest auto insurance rates you find make sure you check their ratings and underwriting standards to make sure you will not be left holding the bag should a disaster strike you or your family. 

What is Underwriting & Why Should You Care

Underwriting are rules that insurance companies must follow to decide whether to insure you and at what rates.  Insurance companies will try to determine potential drivers’ risk factors and drives with the lowest risk factors will receive the most inexpensive auto insurance rates.  The following categories are used by most insures to determine these rates.

  • driving record
  • car make and model
  • prior insurance coverage
  • consumer credit history

Types of Coverages

An auto insurance policy is actually made up of several types of coverages that you must understand to get the most inexpensive auto insurance premiums.

  • Bodily injury liability
  • Property damage liability
  • Personal injury protection
  • Uninsured and Underinsured motorist bodily injury
  • Uninsured motorist property
  • Collision
  • Comprehensive

Whew! That’s a lot of coverage.  In a latter article we will discuss these coverages and what they mean to you. 

Rating Categories

When you are approved for insurance coverage the insurance company will determine which category of driver you belong to.  These three rating categories are preferred, standard, or nonstandard.

  • Preferred – This category is for drivers with the lowest risk factors and are the safest drivers.   Preferred drivers have a clean driving record for the past few years and are rewarded with the most inexpensive auto insurance rates available from the company.
  • Standard – Moderate risks drivers will fall into this category.  The rates for standard drivers are more expensive than for preferred drivers. 
  • Nonstandard – High risk drivers are placed into the nonstandard category.  They will pay the highest rates for insurance.  This category may include drivers under 25, beginning drivers, or drivers with histories of accidents or poor policy payment records.

Often finding the most inexpensive auto insurance is more about your risk factors than anything else, but by carefully shopping auto insurance companies in your local area as well as online, you can significantly reduce your rates.  Be sure you check the financial strength of the insurance company before you just go with the lowest premium policy or you may be paying your money for nothing.

Inexpensive Auto Insurance Resources:

Be sure to visit Commercial Insurance Source to find the latest news, information and tips on inexpensive auto insurance.

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