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AUTO
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With so many choices currently available in the
auto insurance market, it can be quite difficult to know which
products to choose. Understanding some basic facts about the
insurance market can help you to make informed decisions. Following
are five facts that you need to know about the auto insurance
market.
1) Premium Plan - Is it worthwhile? It is now possible to purchase a
deluxe insurance package that includes new car replacement and
accident forgiveness among other services. You will pay heavily for
these add-ons, so be sure that you understand exactly what you are
getting. You may be able to get similar benefits without purchasing
the premium insurance.
2) Shared Market versus Nonstandard Market - Drivers with below
average driving records should shop extremely carefully for auto
insurance. Shared market insurance companies are regular insurance
companies that share the risk of poor drivers. Consequently, their
rates are rather high. A new entrant to the auto insurance business
is the Nonstandard market. This market consists of a series of
specialty companies that exist solely to insure nonstandard drivers
and competition keeps their rates somewhat lower.
3) Most and Least Expensive Cities in America for Auto Insurance in
2006 - The least expensive city in America was Roanoke, VA. There
the average annual premium was only $912. The most expensive was
Detroit, with an average of over $5,800. While you cannot plan a
move based on insurance prices, knowing the insurance market as well
as other cost of living concerns can help you decide between two
comparable cities.
4) Downtown is the most expensive - As you may already know, auto
insurance rates are always higher in cities than they are in small
towns and suburbs. What you may not know, however, is that even
within a city your zip code matters. Simply choosing a home in a
more residential portion of the city rather than downtown may save
you hundreds of dollars.
5) Purchasing auto insurance is a numbers game - It is entirely
possible that you will pay for auto insurance for years and never
need to use the policy. However, it is equally possible that you
will need your insurance as soon as you drive off the lot. You
cannot predict all things that could theoretically happen to your
vehicle. Hence the necessity of playing the numbers game. Look over
your budget and think through what would happen if you had an
accident. Also determine how much you can realistically spend each
month. Then shop around to get the best insurance for the money you
can afford to spend. Be sure to consider varying deductibles.
There are so many options available in today's auto insurance market
that it would be quite time consuming if not utterly impossible to
make the "perfect" choice. However, understanding the market and the
variables over which you have control will assist you in making a
smart decision. Take the time to consider your options and you will
find auto insurance that works well for you.
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